China has increased the reserve capital ratio for Chinese banks by a full percent. Luckily HSI and Shanghai index closed today. But might be a bigger bloodshed tomorrow if Lehman decides to announce its earnings tonight.

Agriculture commodities rallying amid oil spike. This will cause bigger inflation.

Yeah, let's wait till Bank Negara increase interest rate first before buying blue chip stocks.

Yes, holland too. But no robben? HOW?

GOAL GOAL GOAL, ale ale ale, tonight two good matches. I hope France loses..

HAHAHA, yes taking Romania.

High oil prices - Good for industrialized nations? Bad for emerging markets?

Astro 817 , 2:45 am tonight. BETTER watch football than buying CI stocks. Mana tahu tomorrow flip flop BN announce interest rate increase.

For years, emerging markets have enjoyed low priced labor due to subsidized oil. With India, Malaysia raising fuel prices (China might follow suit after olympics), the comparative advantage is no longer there. In some sense, the playing field now is LEVELED; and outsourcing does not make any sense when cost of logistics is very much increased. Therefore, cost of manufacturing of industrialized nations might be cheaper in the medium run.

Why do the industrialized nations hold an advantage? Because industrialized nations are a step ahead in the conquest of being energy efficient. The emerging market has yet to develop energy efficient technology such as the capability to build nuclear reactors, carbon capture power plants, etc.

Hence, more and more investors will withdraw their investments from Asia, and definitely buying US equities since return is safer and yield is definitely larger in the shorter term.

This post has been edited by AdamG1981: Jun 9 2008, 06:40 PM

Lehman announced USD 2.8 billion loss, plans to raised 6 billion usd in preferred, and stock sales. No details yet on the entire gameplan.

Financial stocks in U.S might be worried that the credit crisis is still in the very very early stages.

Market will suffer bloodbath tomorrow; Lehman Brothers news will affect big banks in Asia.

Three main factors:

a) Inflation

b) Credit crisis part II??

c) Commodities rally

Afternoon, what a great game last night!

CI will slowly head south, take your profit and run.

CI ends up red......

I think those who have made a healthy profit today should sell and run. Tomorrow might be a big bad day for DJIA.

The Fed Beige book is being released at 2 am tonight.. (while i be waiting for Portugal vs Czech) and the words will be scrutinized closely by investors. Right now, investors think the US economy might dodge the recession bullet, but with signs of stagflation looming, many are scared to invest their money in US equities. Also, on another note, the crude inventories is going to be released at 10:35 pm tonight, i am expecting a fall in inventories of 2 million bpd. anything highter than that, we might see a rapid spike in crude prices again.

IF both reports are indeed "scary" for the investors, we might see a fall of 200-300 points. To avoid a big drop, the FED has to convince investors that they are not planning to raise rates soon but there have been huge bets pointing to a 75 basis points increase.

Take a look at US Treasury 2 year, its now 2.09%; and US dollar has rallied to 1.54 against the Euro after Ben's gungho speech. I am afraid Malaysia will have to follow suit; as UK, US, China, Australia had all reported acclerated CPI/PPI.

US CPI / PPI this friday. FRIDAY 13TH !!!!!!!



This post has been edited by AdamG1981: Jun 11 2008, 08:04 PM

Now it depends on the four Fed chiefs speech later on tonight. They have a tough job, avoiding the word, STAGFLATION.

Here's the FEDS dilemma; if they try to avoid the phrase "raising interest rate", they will risk the OIL of spiking to 150 USD per barrel. Yes, ladies and gentleman, this is 15 dollars away as we speak.

China has imported 10% more fuel in May, and demand is still strong in Asia. So if the Fed says, they wont increase the interest rate anytime soon, dollar weakens, and BOOM goes oil.

HOWEVER, if the FED says, okay, inflation is getting out of control, we probably might increase interes rate. Guess what? OIL goes down, STOCKS GOES DOWN TOO!!

Again, base on the Fed's beige book, we can see what headwind the Feds are facing. Either way, the market thinks that the Fed's hands are tied.

Dow has been at the lowest level since March.


Here's another food for thought:
Agricommodities are getting pricier, with corn, wheat, rice getting more expensive.

Again, DOW JONES and S&P has hit 3 month low, and 2 month low respectively.

This post has been edited by AdamG1981: Jun 11 2008, 11:06 PM

Here's one interesting article:
http://www.cnbc.com/id/25094854

Pimco's McCulley: Government Understating Inflation

Same situation here in Malaysia. IT's very dangerous if BN tries to deny that the country's inflation rate is "controlled". IF inflation which i think is already out of hand, Bank Negara will have to increase interest rates (bigger raise, and a much faster rate) in the future to combat inflation.

Nikei down almost 2%. China's CPI report is due.

KOSPI, TOPIX, Shangai Index, Bombay Sensex and DJIA will affect CI trading today. Judging from last night events, BLACK FRIDAY IS VERY LIKELY.

Word on the street is Goldman Sachs have more writedowns next week when it reports its earnings. Also, Lehmann is needing another huge capital injection which is highly dilutive to the company's shareholders. Any bank run on LEHMANN next week will see DJIA collapse almost 300-400 points.

US jobless claims & retails sales due tomorrow, CPI/PPI on Friday.

HOLD at your own risk!

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Added on June 12, 2008, 8:25 amA recession is a easier problem to handle, while a lingering inflation hurts the economy longer. Therefore, its "best" for the government to raise IR soon because the economy suffering from inflation will require very drastic measure in the near future.

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Added on June 12, 2008, 8:30 amWill China raise INTEREST RATE or let YUAN appreciate more? Another RRR increase?

Tick Tock Tick Tock

Shanghai / Hang Seng to crash today?!?!

This post has been edited by AdamG1981: Jun 12 2008, 08:32 AM

Don't ever have any emotions towards the stocks you purchase. With so much uncertainty over the remaining week, and next week, you might want to sell and stay on the sidelines.

Couple of heavyweights reporting earnings next week

Adobe Systems
Best Buy
Goldman Sachs
FedEx
Morgan Stanley

If Goldman Sachs does indeed writedown another USD 10 billion, prepare for a big big drop.

Australia unemployment rate increased to 4.3%, compare to 4.2% predicted by reuters.

China's CPI report out next at 10:00 am +8 GMT





This post has been edited by AdamG1981: Jun 12 2008, 09:45 AM

That's because many punters know BLACK FRIDAY/BLACK Monday is coming....