Straits Times Index   

STI

Lehman Brothers (LEH.N: Quote, Profile, Research) slashed earnings estimates on four top Wall Street banks, adding its voice to the chorus of widely followed research analysts warning credit turmoil would cut into bank profits.

Adding to negative sentiment Merrill Lynch cut its recommendation on Wal-Mart Stores Inc's (WMT.N: Quote, Profile, Research) stock to "sell."

"People are wary of the financials," said Eric Kuby, chief investment officer at North Star Investment Management Corp. in Chicago.

"I do think that people continue to focus on the big question, 'How widespread are these credit problems?' And then you have high-profile analysts reminding the market that there are probably bad earnings from the financials coming in the back half of the year because of write-downs."

 

The U.S. Federal Reserve is not rushing to cut benchmark interest rates because it wants to break investors of the view that the central bank is there to bail them out, an article in the Wall Street Journal said on Thursday.

US must take the bitter pill to resolve the structural defects to the financial system for years of easy credit. Mr Bernanke has not made his statement yet whether to cut interest rate.

Whether credit squeeze will take a toll on the financial markets for the central banks to act it is yet to be known. If barring any unforeseen circumstances, markets will likely spiral downwards from now onwards. Funds will be redeem from all over the world to provide needed liquidity to sustain operations for the mortgage houses, financial institutions, insurance and speculators. See funds redemption from Asia as a quick way to raise money. Total Funds redemption from Asia market last week US$3Billions

 

Global credit crunch almost over: Mobius Fund manager says markets may soar to new heights barring unforeseen events

 

Today's Business Times

 

Stock Market Will Eventually Collapse

Congressman: Stock Market Will Eventually Collapse
Ron Paul says martial law provisions in place to deal with economic discord
Paul Joseph Watson
Prison Planet
Wednesday, August 29, 2007

Texas Congressman and presidential candidate Ron Paul says that attempts to rescue an ailing stock market last week, during which the Fed pumped in billions in liquidity, were merely a stop gap measure - and that an economic collapse is all but inevitable.

"They think that they can control it but eventually they can't, as powerful as they are eventually the markets are more powerful," the Congressman told the Alex Jones Show yesterday.

"The dollar can't be kept in check because eventually it will come unwound," he added.

"But I think the most significant figure we've heard in the last few weeks is the measurement between 2000 - 2005, the clear cut admission that real income has gone down, which is a reflection of the dollar."

Paul explained that recent attempts to pump liquidity into the markets are only a temporary fix and that the long-term effects of doing so spell disaster for the economy.

"The dollar is plunging no matter what you read and hear about and no matter how hard they work to keep the bubble going the only way they can do that is creating more money....causing the dollar to go down even faster, the market seems to be reassured - there's a contrivance to try to hold this together....but it won't last, eventually it's going to collapse," said Paul.

The Texas Congressman cited the repeal of the Insurrection Act as opening the door to a declaration of national emergency and martial law which could be instituted for any number of reasons, including civil disobedience in the event of an economic downturn and a run on the banks.

"If in 6 months or a year there is total chaos who knows what they might try to do," said Paul.

The presidential candidate also slammed the abolition of Habeas Corpus as a "very dangerous sign" that plans were being laid for martial law.

"Why would they change them (the laws) if they didn't plan to use them," concluded Paul.

Suspicions were raised last week when a mystery trader risked billions of dollars after buying 245,000 put options on the Dow Jones Eurostoxx 50 index, in effect a speculation that the market would crash by a third before September 21st.

 

Could all the negative and fearful posts in this forum with 12000 plus members and countless visitors contributed somewhat to the negative sentiments...?

 

what is the impact of a rate cut? Good or bad? What about the bad mortgages? will it go away...

The answer is NO.

Structural Defects are not resolved for the easy credit in USA.

 

Oei beat Bernanke by 1/2 goal today on STI because of weak sentiment.

 

It is a matter of belief rightly or wrongly.

Oei is a local folk hero.(like robin hood?)

Bernanke is a fallen American Idol as far as chinatown is concerned.


 

 

who is more powerful? bernanke or ohl ?

 

Oei Hong Leong predicts STI 2500-better sleep well with your money under the pillow.

China town selling and hence weakness in the STI after first few minutes? 

 

Dust start settling down after a strong gush of wind this morning...

 

Didnt take enough vitamin C (Cheong) today.  Atat disappointed by the cheong lotsa profit taking, hopefully in the avo will be better.

 

 

QUOTES:

Singapore shares are expected to open higher Thursday after Wall Street rebounded on renewed optimism that the Federal Reserve will cut interest rates.

Fed Chairman Ben Bernanke said in a letter to Senator Charles Schumer that policymakers are "prepared to act as needed" if the market's turbulence hurts the economy, raising hopes of a rate cut at the Fed's Sept 18 meeting.

On Wednesday, the Straits Times Index closed down 8.34 points or 0.3 percent at 3,334.66.

Losers beat gainers 570 to 250, with 867 stocks unchanged.

Volume traded was 2.22 billion shares valued at 2.28 billion Singapore dollars.

Trading will likely remain volatile ahead of the next Fed meeting.

"The Fed is in a dilemma as its inflationary concerns remain top priority," said Fraser Securities research head Najeeb Jarhom. "Even if it cuts rates, this does not mean that the current volatility ends. In fact there could be fresh rounds of selling later on as the market would like to see further rate cuts."

 

This is a whiplash effect due to shortists/hedge funds

Lesson to all Spore investors is don;t sell, does who panic will suffer loss,

Shortist looks for such assume downturn to press down prices, epecially fuu time one or pros.

Their time is almost up already as mkt stabilise by the day

See "7 time tested rules "



7. Practice patience

It never was my thinking that made the big money for me. It was always my sitting. Got that? My sitting tight!
--Edwin Lefevre

 

If I am not wrong, tommorrow is Malaysia's 50th National Day 

 

Amazing, still wonder how STI can recover 90% from its intraday low.... thought today sure kena sea of red again

 

It is so hard to guess the market direction these days. 

 

Shortists have a shock today.

 

Today's market is the test of the "gut"!

Those who pick up on cheap this morning had made a handsome profit before closing.

Got deceived here.