Stockmarket crash imminent? With house prices to follow?

[Deleted User]

I had a thought, with the borrowing prices going up every single company in the world will be losing more money on the loans. This will create big profit warnings at companies with more then ~20% loans to revenues, the panic will spread and the prices will crash as the hedge funds cash in on bad news by selling short.

NRK, AL and B+B just the start? I have been seeing increasing bear activity circling a number of stocks. Yes the FTSE has been rallying recently but is it on sinking sand?

free4440273

Just look at the Dow also; 15K within its sights; oil today reached an all time high; i'm no chartist but from what i've read some people think that technicals suggest a rally towards 14,400/500. madness i know: but i think the Fed will oblige with MORE rate cuts; they don't give a damn about the dollar...any/all bad news is being ignored - it's as if sub-prime never happened. crazy days... Good thread

[Deleted User]

The cost of borrowings are going up despite rate cuts, there is becoming a disjointing between the two. This is whats worrying, the BOE rate is at 5.75 and likely to come down yet the borrowing rates are going up still to cover the losses on defaults and bank profits. All the risk hedges are basically seem to me slightly unhinged - life out of balance.

1987 - stock market crash (USA - 40%, UK 25%)
1989 - housing market crash (UK 40%)

What could make matters worse everyones gunning for the markets, money is being piled in to the churning system more so in america after their house price crash. The stocks in yankville are crazily over priced, I wouldnt touch them with a barge pole. There is indeed a bull run on the yank stocks and to some extent UK as well with the ftse at 6700.

But have a look at the increasing number of short positions too. http://www.advfn.com/ shows this under the companies financials. Bear attacks are more frequent thats for sure!!! The successes of 3 fairly big bank corps will help egg them on.

Pretty much any investor in anything should be concerned about the near term future.

free4440273

...this could all unwind big time if the dollar goes into free fall also. indeed, the currency markets i think will dictate any collapse in the general equity market i think. sterling in particular is looking VERY over valued. The dollar going into free fall could send the markets reeling...interesting debate... Have a really good weekend everyone

edit: BofE will cut rates in November i suspect - inflation of no concern to them and billions thrown at NR. what a way to run an economy...

ManAtHome

Are the hedge funds just getting ever-more speculative to make up for the dodgy loan losses and/or potentially moderate/minimal bonuses this year. After all, if it goes t!ts up, it's only the punters cash, and if things stay level for the rest of the year they may have to start remembering where they parked their other Maserati...

Surprised we haven't seen more action from China and the Middle East last month - they have plenty of cash sloshing around, strange they mssed the mid-season sale.

free4440273

commodities in particular are showing huge, almost unwarranted new highs - just look at the mining shares such vedanta, rio, anglo american: many of them this week have reached all time highs. i would have expected some profit-taking here - i saw none of it (a slight dip today). it's staggering actually...

free4440273

looks like the thread died a sudden death - not the stock market. something we said???:D

ramborai1987

i wouldnt think gordon brown will allow a crash on the UK market in his current situation. and his tenure has been very stable. As long as he is priminister all should be good. However other countries like emerging markets its possible to see it happening.

dunstonh

ramborai1987 wrote: »

i wouldnt think gordon brown will allow a crash on the UK market in his current situation. and his tenure has been very stable. As long as he is priminister all should be good. However other countries like emerging markets its possible to see it happening.

Gordon Brown was chancellor when the biggest stockmarket crash since the 1970s occured.

His taxation policy has been accused of making the UK stockmarket one of the weakest performers in the Western world and the FTSE100 is estimated to be 1000 points lower than it would have been under previous policies.

He inherited an economy that was well positioned by the previous Govt, got lucky with global growth, global cheap borrowing and global low interest rates.

Lets measure his ability once the hangover after the good times has had time to bite. That shouldnt be long now that property prices are starting to fall, credit is not so easy or cheap to get and inflation pressures still exist.

baby_boomer

ramborai1987 wrote: »

i wouldnt think gordon brown will allow a crash on the UK market in his current situation.

And how is Gordon going to control the international stock markets, never mind the UK one?

free4440273

Have a look also at the Hang Seng Index: remarkable day on day increase.