Dipford Share Discussion Threads

[druid2] 27/9/2002 08:55

Energyi - yet another excellent thread which I had not seen before you referred to it on the BARC thread this morning. Thank you.

[energyi] 27/9/2002 08:44

Bounce from "double bottom" could last for 2-4 weeks IMO

[wageslave] 15/9/2002 17:15

Did you see this. The issue of debt is rearing its ugly head:

[energyi] 15/9/2002 17:09

WHEN WILL THEY start talking about DEBT?

Fed says recovery appears in doubt
Many economic sectors are weak, it reports, except for those propped up by low rates

Sam Zuckerman, Chronicle Economics Writer Thursday, September 12, 2002

In a downbeat assessment of the nation's economy, the Federal Reserve reported Wednesday that the recovery that began late last year appears to have lost momentum.

"The growth of economic activity has slowed in recent weeks," the Fed concluded in its Beige Book report, a survey of regional business conditions issued eight times a year. In most parts of the nation, growth is "slow and uneven," the central bank noted.

The report was in line with recent data that has showed weakness in employment, technology, manufacturing and retail sales, despite pockets of strength in sectors that benefit from low interest rates.

"It's autos and housing, and not much else," said Ed McKelvey, an economist with the brokerage firm Goldman Sachs.

Experts say the national economy can't get on track, because businesses are leery of making big investments or hiring new workers. Last week, the Labor Department reported that the economy added only 39,000 jobs in August, with the entire gain coming from government.

"Employment is the glue that holds recovery together, and employers are fairly reluctant to hire now," McKelvey said.

[kvu] 06/9/2002 02:34

Energyi

LOL. I shall let you know in due course what they are teaching in the "Halls of Academia" some point this month as I start back at the LSE. I am sure the economic advisors at the LSE are also saying what Mr Chaudry at Merrill Lynch is saying and that is no double dip recession and all will be fine. My economics teacher and I had an interesting discussion, but he told me what he can say in the press and other news anouncements was very different. People take the views of the LSE very seriously and any Negative economic comment wouldn't be taken very well by the general Joe Bloggs. I hope I am not paying too much for this over priced teaching that may only tell me how to buy into a falling economy, but then again I will have a designed university label to do it with. Better get the tuition fee paid today...

[energyi] 05/9/2002 14:03

By the time these laggards all wake up, the market will be 20-25% below
the "selling window".
(Check the date at the top of the thread, it's really not so difficult,
God knows what they are teaching in the Halls of Academia these days)

[energyi] 05/9/2002 14:01

MAINSTREAM ECONOMISTS are beginning to wake from slumber:

Dreaded Double Dip Recession In The Cards? - US News

Posted By: CivilBear / Date: 9/5/2002 at 08:27:51

In five out of the last six recessions, there was a double-dip back into recession.

This time, said the "experts", would be different.

Looks like those "experts" may have been very, very wrong.

Check out this column by U.S. News editor Mort Zuckerman:

After bubbles, a double dip?

The bear market that has drawn so much media hype may be seeping into the foundation of our economy in a way that could seriously hinder recovery. The enormous loss of wealth is bad enough, but tumbling stock prices are also perceived as a signal to batten down the hatches.

One consequence is a tightening of conditions for corporate credit. Banks are demanding higher-risk premiums despite the fall in yields on government paper. Rising finance costs have exacerbated the long-running contraction of investment. The decline had already been the worst since WWII, stretching to 21 months of consecutive drops. And the investment bust isn't over. Recently, the business spending index created by the authoritative consulting firm G7 Group showed fixed investment still contracting and unlikely to increase for a while.

It was the collapse of business spending that ended the boom, an unusual trigger for a recession. Typically, booms die when consumers, worried by rising interest rates, stop spending. High interest rates force consumers to scale back on big-ticket purchases like cars and homes, while businesses cut production and shed jobs. We came out of just such a recession a few years back by cutting interest rates and easing money.

Overstocked. This time, though, it wasn't the Federal Reserve that put on the squeeze. It happened after businesses woke up and realized that the investment boom of the '90s had raised capacity way beyond foreseeable demand. This was especially true in the tech sector. Inventories of computers, communications equipment, and semiconductors quadrupled between 1994 and 1998, and they doubled again between 1998 and 2000. With an excess capacity of both equipment and employees already in place, investment plunged and the economy started to freeze up. As a result, corporate profits shrank about 20 percent from the last quarter of 2000 to the middle of 2001. As Stephen Roach of Morgan Stanley has pointed out, business capital spending for the first three quarters of 2001 declined by $88.2 billion in inflation-adjusted terms, more than accounting for the entire $57.2 billion decline in real gross domestic product during the same three-quarter interval. The decline in information-technology spending alone exceeded the total decline in GDP. The investment bubble and bust was clearly the culprit. In fact, the sectors that usually push us into recession–consumer durables and residential construction–collectively boosted GDP growth, instead of depressing it. The 11 interest-rate cuts by the Fed last year put extra cash in consumers' hands by encouraging refinancing of home mortgages and enabling manufacturers of products like autos to slash rates.

But now we're faced with another conundrum. Conventional recession recovery comes after pent-up demand for cars that weren't bought and houses that weren't built is finally released. Today, there is no pent-up demand in these sectors–they are the ones that have been booming–and they have borrowed from the future.

The post-bubble recovery of the economy is thus far more fragile than might have been hoped. The dangers are twofold–either the economy will dip into recession again, or the levels of economic growth will remain well below potential annual output. That would mean a risk of deflation and increased unemployment, which would knock the pins out from under consumer spending, eliminating our last pillar of strength.

Clearly, as the Fed governors said at their last meeting, "The risks are weighted mainly toward positions that may generate economic weakness." This makes it all the more disturbing that the Fed opted to confine itself to mere words. Despite sharply lower growth in the second quarter and the summer stock-market meltdown, there was no rate cut. If a federal funds rate of 1.75 percent was considered appropriate last year, when we had higher stock indexes and didn't have the shock of corporate scandals undermining business confidence, can it possibly still make sense now?

The Fed's failure to do more is especially puzzling when you consider that we now confront a fiscal deficit of some $200 billion, limiting the option of big tax cuts. The White House is weighing further cuts to stimulate business. But such measures are unlikely to have enough effect on business investment to justify the long-term fiscal costs. A better approach would be for the Fed to support loan guarantees on a fifty-fifty basis, say, with state governments to make sure that local public works and other job-creation programs aren't cut back more.

The danger here is of a double-dip recession. We saw the same thing in five of the past six downturns; if it doesn't happen this time, we could see, instead, an extended period of subpar growth that will still feel like a recession. The gloom, in other words, hasn't quite yet lifted, and there's still just a bit too much whistling past the graveyard.

[energyi] 30/8/2002 14:51

From BearMarketCentral "Chart of the Week":



Confidence Continues to Falter...

Fundamentally, the only difference between a cyclical recession and a protracted, rolling-recession like Japan has experienced over the past decade is confidence. The latter occurs when the loss of confidence turns into demoralization - which is most common after a "bubble" is popped and vast wealth is wiped out.

So this week's Consumer Confidence numbers were not great news to the Federal Reserve. The bad news is that overall confidence hit an 9-month low. The worse news was the "current conditions" component hit an 8-year low! And if there was any bright spot, it was simply that the "future expectations" wasn't down nearly as much. The jury is still out on whether the Fed has lost control of whether our post-bubble economy is traversing the ominous path of Japan in the early 1990's. But the next key "confidence" gauges -University of Michigan's sentiment index this Friday & the ISM Purchasing Mgr's Report next Tuesday- will undoubtedly be at the top of Greenspan's "Watch List."

Analysis by James Stack:

[energyi] 11/8/2002 18:13

hv,
LOL. doesnt take much to get you excited.
My guess is that you are about 12 years old. Go to bed!

[hv] 11/8/2002 18:04

Oh yes the recession has started.Gloom and doom everyhwere,no holidays and no jobs stay at home all day. yes the recession has started but somehow the stock market has picked up. Do they know something us morons dont ?

[energyi] 11/8/2002 17:59

NEW RECESSION has already arrived... in Scotland

"The Recession has Landed": The Business, 11/12 Aug.2002, pg.14

Despite politicians determination to speak no evil, Scotland is now
officially in recession.

CUT through the dissembling and social inclusion waffle emanating from
the Scottish political elite: the harsh, inescapable fact is that
Scotland's economy is now in formal recession.
...
The official definition of recession is two successive quarters of
falling output. Scotland's GDP fell by just 0.7% in the first three
months of this year. In the previous three months, GDP fell by 0.3%.
Recession it is. Over the year to end March, Scotland's economy
grew by just 0.7%, less than half the rate of the UK.
...
Figures showing inward investment have plunged by 85% over the last year,
from £1.7 bn to just £271 mn, or just 46% of the budget of the agency
in charge of it. The number of jobs created has crashed from 14,346
to 6,386... What a platform for the future: an economy in recession,
collapsing inward investment, and soaring business insolvencies. These
are hammer blows to the complacency of a political establishment that
has been in denial over the true state of Scotland's economy... Scottish
growth since 1995 has averaged an anaemic 1.7%, compared with 2.7% for
the UK as a whole.

[energyi] 27/7/2002 15:08

"The American consumer is about to be caught in a vice. At work, in my view, will be the combined impacts of three powerful macro forces that take dead aim on US consumers -- wealth destruction, a long overdue US current-account adjustment, and the coup de grace -- a negative income shock. With all of these forces aligned against the heretofore-resilient consumer, I believe the last line of defense against the double dip will finally be breached.":
MORE:

[energyi] 17/7/2002 10:43

Why the Next Great Depression:


Chart from The Economist, 1999:

[energyi] 10/7/2002 08:10

At 26, Khuram Chaudhry, an equity strategist at investment bank Merrill Lynch, probably epitomises the breed of youthful City analyst who Tory Chancellor Nigel Lawson dismissed as 'teenage scribblers' during a period when he was forced to defend his handling of the economy. Chaudhry does not expect a sustained slump. For that to happen, the US economy would have to experience a second dip into recession, and he does not expect this.

(what a bonus: teenage scribbler and the detested ML
in the same paragraph!)

[blackstone] 01/7/2002 09:13

A quote from the economist John Kenneth Galbraith

"recessions catch what the auditors miss"

[energyi] 01/7/2002 08:27

THE DATES HAVE GONE HAYWIRE...

Dates in Article ... My revision:
Cycle Wave B

Wave (A) Up
Jan. 2002 5 11

Wave (B) Down
May 2002 9 15

Wave (C) Up
Oct. 2002 5 20 ..... Finished earlier this year

[energyi] 01/7/2002 08:18

I found this very interesting post on SI: (Note Date!)
______________
The Upcoming Killer Wave & Cycle Bloodbath:
Part II
Posted By: Tommy Bear
Date: Sunday, 12 November 2000, at 3:13 p.m.
[Condensed from a series of e-mails made available August
17, 2000; Revised November 12, 2000]

Before I begin, you should know that I agree with Robert
Prechter that the next major bear market in the Dow will
be of Grand Supercycle degree. The last time a Grand
Supercycle bear market began was 1720, the year of the
peak of England's South Sea Bubble and France's
Mississippi Madness. Although that bear market lasted
approximately 64 years, the first leg down was the most
vicious part, collapsing stocks 98% in just two years.
While that leg down was of Supercycle degree (i.e., the
same degree as the entire 1929-1932 move which brought
stocks down 89% in just shy of 3 years), it was
particularly vicious because it was a down leg in a Grand
Supercycle BEAR market (whereas the 1929-1932 down move
was a corrective wave in a Grand Supercycle BULL market).
By contrast, the two Cycle degree bear markets since 1932
brought stocks down 52% in 5 years (1937-1942) and 45% in
two years (1973-1974), i.e., much more modest declines by
comparison.

Although Prechter anticipates the next Grand Supercycle
bear market to be approximately 100 years in length, the
only portion that concerns me at this point is the first
Supercycle leg down in that bear market, as that move is
likely to exceed the intensity of the 1929-1932
experience. As the 1929 down move occurred over a 34 month
period (a Fibonacci number), my best guess at this point
is that the upcoming down move may be close to a Fibonacci
1.618 times as long or approximately 55 months in length
(another Fibonacci number). The expected decline in the
Dow during this period is 91% to 98%.

Robert Prechter, in "At the Crest of the Tidal Wave,"
said, on the subject of the probable pattern of the first
leg down: "Regardless of which specific long term pattern
ultimately unfolds at Grand Supercycle degree, there is no
question that the first Supercycle degree decline will be
of the zigzag family. It will be composed of three waves,
to be labeled A-B-C or W-X-Y. Every initial decline
through Primary degree (the "first" waves), and probably
through Cycle degree (Wave A), will be composed of five
waves in order to be compatible with the larger trend." To
translate this for you non-Elliott Wavers, the first big
move down (Cycle Wave A) should be a 5 wave move (down-up
-down-up-down), followed by a big move up (Cycle Wave B)
in a 3 wave move (up-down-up), then followed by a final
big move down (Cycle Wave C) in a 5 wave move (down-up
-down-up-down).

The most logical time pattern of this sequence, if indeed
it is approximately 55 months in length, would be a Wave A
that is a Fibonacci 21 months in length, a Wave B that is
a Fibonacci 13 months in length and a Wave C that is a
Fibonacci 21 months in length (i.e., equal in time to Wave
A). For Wave B, it would be logical for the breakdown of
that 13 month move to be an up leg of 5 months, followed
by a down leg of 3 months, then followed by another up leg
of 5 months. Again, this is purely guess work at this
point but, as I said, I'm searching for the most probable
bearish pattern if the Dow did indeed reach its Grand
Supercycle Wave III peak on January 14th.

If we were forced to modify the above ideal Elliott Wave
scenario based on what the cycles tell us, the big
surprise is that little modification is necessary. As you
will see, the cycles project a move that is 54 months in
length, consisting of a 20 month five wave down move, a 14
month three wave up move, then a 20 month five wave down
move. The up move is broken down into 5 up months,
followed by 4 down months, then followed by 5 up months,
i.e., very close to the 5-3-5 sequence stated above.

Here's the breakdown by wave and month. The first column
references the location within the 8.6 month cycle, and
the second column references the location within the 40
month cycle; months that have brackets are key months
under Armstrong's 8.6 year cycle analysis; the month
designated with "G" is the month in which gold's 8 year
cycle is expected to bottom; and the month designated
with "K" is the month in which the 55 year K-Wave cycle is
expected to bottom:

Cycle Wave A

Wave (1) Down
Jan. 2000 7 27
Feb. 2000 8 28
Mar. 2000 9 29

Wave (2) Up (most probable corrective pattern: sideways)
Apr. 2000 1 30
May 2000 2 31
June 2000 3 32
July 2000 4 33
Aug. 2000 5 34

Wave (3) Down
Sep. 2000 6 35
Oct. 2000 7 36
Nov. 2000 8 37
Dec. 2000 1 38
Jan. 2001 2 39
Feb. 2001 3 40 G (Gold bottom)

Wave (4) Up (most probable corrective pattern: sharp)
Mar. 2001 4 1
Apr. 2001 5 2

Wave (5) Down
May 2001 6 3
June 2001 7 4
July 2001 8 5
Aug. 2001 9 6

Cycle Wave B

Wave (A) Up
Sep. 2001 1 7
Oct. 2001 2 8
Nov. 2001 3 9
Dec. 2001 4 10
Jan. 2002 5 11

Wave (B) Down
Feb. 2002 6 12
Mar. 2002 7 13
Apr. 2002 8 14
May 2002 9 15

Wave (C) Up
June 2002 1 16
July 2002 2 17
Aug. 2002 3 18
Sep. 2002 4 19
Oct. 2002 5 20

Cycle Wave C

Wave (1) Down
[Nov. 2002] 6 21
Dec. 2002 7 22
Jan. 2003 8 23

Wave (2) Up (most probable corrective pattern: sideways)
Feb. 2003 1 24
Mar. 2003 2 25
Apr. 2003 3 26
May 2003 4 27

Wave (3) Down
June 2003 5 28
July 2003 6 29
Aug. 2003 7 30
Sep. 2003 8 31
Oct. 2003 9 32

Wave (4) Up (most probable corrective pattern: sharp)
Nov. 2003 1 33
Dec. 2003 2 34
Jan. 2004 3 35

Wave (5) Down
Feb. 2004 4 36
Mar. 2004 5 37
Apr. 2004 6 38
May 2004 7 39
June 2004 8 40 K

It makes sense to consider the last month of a given wave
and the first month of the next wave to be a transition
period in which the Dow searches for a peak or trough
before making a move in the opposite direction.

Now for the disclaimer: The above scenario is merely my
best possible guess of how the Dow may move in a Grand
Supercycle bear market based solely on the cycle patterns
I provided in an earlier post and the most bearish Elliott
Wave interpretation from this point forward using Robert
Prechter's work. As even under the best of circumstances a
given cycle may turn out to be up to 5 percent longer or
shorter (in my experience) than its average duration, the
above calendar obviously states a degree of precision not
likely to be anywhere close to the actual case. And, of
course, Prechter has been known to be early, so keep an
eye on the outside K-Wave date that ends in early 2007.
Finally, this entire analysis assumes the Dow reached its
final peak in January of this year. If that turns out to
be incorrect (as evidenced by a new high in the Dow
occurring at any time after that), the above analysis will
need to be revised based on the month of such later peak.

Given the very high odds that the above analysis will be
off, you may wonder why I decided to spend the time to
undertake this project and share it with you. My main
reason is to make it clear to you in no uncertain terms
that very powerful downward cycle forces are kicking in
over the next few years and, with the prospect of a Grand
Supercycle bear market also getting closer by the day, the
combination could be quite lethal to those not prepared,
whether by virtue of the positions in their investment
portfolios or the risks taken in their personal lives
(e.g., high debt levels, employed in a job that will not
survive in a depression, etc.). There are also significant
non-financial risks at play here, with the prospects of
serious invasions of privacy and serious threats of
physical violence becoming increasingly likely, especially
during Cycle Wave C's decline, when final hopes are dashed.

Although as a long term trader, I call 'em the way I see
'em, as a humanist, I hope I'm wrong, especially as to the
intensity and depth of the expected financial and economic
decline. This country has never had a Supercycle degree
decline without an economic depression. I hope people
everywhere use this opportunity to reevaluate what's
important to them, to see that, regardless of severely
reduced job and financial prospects, they are and remain,
as wealthy as ever.

Tommy Bear
LINK:

[energyi] 20/6/2002 09:16

oneliner,
It depends on the "expert". If they are writing in the Sunday Times,
be careful. (when did I ever say "things would be okay?")

Here's one I like:

Picture Of A Bubble Deflating
(Comstock Partners)
Since we began writing these comments in February 2000 we have never taken our eye off the major theme-that we were in a financial and economic bubble that would burst and deflate. Going beyond the day-to-day detail of what's happening in the market, what we are now witnessing is simply the continuing deflation of that bubble, and it will not be over until the major economic and financial imbalances are corrected and the market returns to reasonable or cheap valuations. The imbalances cannot and will not be corrected by a mild garden-variety recession

The rallies are getting weaker and weaker and are occurring on tepid volume. Today the decline was caused by disappointments in Advanced Micro Devices, Apple and Ciena following other recent downgrades in a wide variety of companies. The disappointments are a continuing reaction to the bubble period when a vast amount of manufacturing capacity was added that now has to be worked off. The bubble was also characterized by a record increase in corporate and consumer debt, an extremely low consumer savings rate and record trade deficits. Virtually all of the disappointments we see in detail on a daily basis are not isolated events, but are directly or indirectly related to the deflating bubble.

As the rallies weaken and the disappointments mount we are getting closer and closer to the point where investors just give up on the market and throw in the towel as they have done following every other market bubble in history. Currently even the market sectors that have previously been somewhat strong are
showing ominous sign of weakness. We examined all 46 Exchange Traded Funds (ETFs) and found that every one of them has now turned down and all 46 are below their 50-day moving average. The ETFs cover a wide range of industries, sectors and countries and their recent actions do not paint a pretty picture. The ETFs include sectors representing growth and value as well as big stocks and small stocks. They include drugs, health care, finance, basic industry, technology and consumer staples as well the Dow, S&P and Russell indexes. They also include indexes covering Europe, Japan, Mexico and Taiwan.

In sum we think that all of the fundamental and technical factors are now in place to engender a severe market decline. Although it is always possible that another rally could intervene, we believe that would be a
highly risky bet to make.

[ekuuleus] 17/6/2002 07:08

Sell, go into rented accomodation and move your cash into Euro. Even better, when the uk is devalued by 20% and joins the euro, the gain is tax free.

[oneliner] 17/6/2002 01:33

Energyi, I'm sure you posted on another thread that the "experts" weren't to be listened to and things would be okay. Are you contradicting yourself or sharing your handle with another poster?

[energyi] 16/6/2002 23:24

Taylor On US Markets & Gold

excerpt:

2002 PARALLELS WITH THE 1930'S.

- A major decline in stock prices. (Nasdaq, S&P, Dow show yet to drop)
- The printing of more money (lowering of interest rates) is failing to revive stock prices.
The printing of more money is failing to stimulate the economy.
- We see a beggar thy neighbor foreign currency de-valuation policy on the part of most nations hoping that a lower currency will allow them to sell into the U.S.
We have the spectacle of rising trade barriers, this time fueled by the United States in the areas of agriculture and steel.
- We have a U.S. dollar that is grossly overvalued just as the pound sterling was overvalued during the 1930's.
You have a gold market that was being rigged in order to maintain an overvalued pound sterling. Now we have a gold market that is being rigged in order to maintain a phony overvaluation of the dollar.
- We have excess supplies of all kinds of goods and services.
- We have excessive debt loads that are strangling the demand side of the economy.

[energyi] 15/6/2002 09:06

WE ARE STILL IN A "MANIA":



... you ain't seen nothin' yet.

SEASONALLY, WE ARE IN A "DEAD ZONE"
(Remember: "Sell in May and go away"?):

LINK:

QUOTE:
"Our downside targets for 2002 are as follows (2 in 3 odds):
Dow Industrials 7800-8200 / SPX 800-890 / Nasdaq Composite 1135-1285

Our best case scenario for 2002 is as follows (very low probability):
Dow Industrials 10800-11080 / SPX 1176-1249 / Nasdaq Composite 1945-2100"

[energyi] 15/6/2002 00:53

Funny how no one cared about this warning in mid-May...

And there are so many Bears around today

[energyi] 09/6/2002 00:31

maxk,
That will be a good place for former executives with high spending
wives. What will see do with the house? Depends on how much debt
is outstanding...