Black Monday - Apparently

MJ12

wotsthat wrote: »

I can predict night will follow day and will be correct every day for the next few billion years. Can't predict what the FTSE will be this time next week with any degree of certainty.

As outcomes tend towards randomness (or more likely as the variables increase) the more difficult it is to predict.

I predict that markets will be unpredictable. I'm certain nothing's certain.;) Prices will move tomorrow for sure, I guarantee you.

Thrugelmir

wotsthat wrote: »

The massive upswing at a potential delay in increased rates and yet the DOW is the lowest level it's been for a year. Does that mean the markets are worried about rates going up, going down or not at all?

China's debt is a problem currently 280% of GDP. Growth has been funded by debt. This is going to have an impact going forward unless the issue is tackled. Lowering interest rates (aka USA and GB) merely buys time. The problem remains.

wotsthat

Thrugelmir wrote: »

China's debt is a problem currently 280% of GDP. Growth has been funded by debt. This is going to have an impact going forward unless the issue is tackled. Lowering interest rates (aka USA and GB) merely buys time. The problem remains.

China's debt was 280% of GDP yesterday, the day before and today but markets have been up, down, down. up, down, up, down.

So China's debt hasn't changed and rate rises, as yesterday, may or may not go up in November, 2016 or never.

Market volatility hour to hour is more about psychology than fundamentals.

Generali

Thrugelmir wrote: »

China's debt is a problem currently 280% of GDP. Growth has been funded by debt. This is going to have an impact going forward unless the issue is tackled. Lowering interest rates (aka USA and GB) merely buys time. The problem remains.

Isn't the UK's debt:GDP something like 500%?

Growth has been driven by investment and investment is always going to require debt or a sale of equity. Chinese companies have done the former for the most part.

The problem may come if, as many believe, that Chinese companies have been investing in output potential that simply isn't wanted by the world. Time will tell.

Thrugelmir

wotsthat wrote: »

Market volatility hour to hour is more about psychology than fundamentals.

The fundamentals appear to be the concern. Like the Greece issue this is far from over. What needs to be considered most is the speed in growth of debt. Remember not so long ago that China was a nation of savers.

wotsthat

Thrugelmir wrote: »

The fundamentals appear to be the concern. Like the Greece issue this is far from over.

I'm sure they are but fundamentals are only loosely related to short term market movements. You can't say 'Black Monday' was because the fundamentals are a concern as that would mean they're much less of a concern 48 hours later which would be nonsense as the fundamentals aren't dissimilar to what they were last week.

What's the Ben Graham quote - In the short run, the market is a voting machine but in the long run it is a weighing machine