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investing/trading thoughts for 2012

goodguy1977

Member
Jan 5, 2011
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Happy holidays everyone.

Any thoughts on 2012? I definately think it's going to be a trading environment, volatility will definately be the constant in the new year. Everyone is afraid of Europe blowing up but I think there will be a severe slowdown which will really hit growth. Valuation multiple will really contract. Commodities will get hit very hard which doesn't bold well for our TSX indexes.

Oh and Canadian real estate is going to get hurt.


Happy holidays !

Goodguy
 

gcostanza

Well-known member
Jul 24, 2010
7,818
527
113
Buy low, sell high.
 

FatOne

Banned
Nov 20, 2006
3,474
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With Kim Jong-il dead, there is nothing to stop Chuck Norris from killing us all. It seems those predictions of the end of the world for 2012 are true, there is nobody to save us.
 

Rockslinger

Banned
Apr 24, 2005
32,783
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The markets usually rise in a presidential election year.

The talking heads on BNN said that the de facto default of Greece will be a de jure default in 2012. That money is long gone. Time to write it off and get on with life.
 

nottyboi

Well-known member
May 14, 2008
22,447
1,325
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The markets usually rise in a presidential election year.

The talking heads on BNN said that the de facto default of Greece will be a de jure default in 2012. That money is long gone. Time to write it off and get on with life.
The question is, when you write off Greek debt, through the wonder of the fractional reserve lending system, the 475B in Greek debt will mean AT A MINIMUM about 5 trillion will be removed from the European (and world) money supply... what effect will that have to the world economy....???
 

Rockslinger

Banned
Apr 24, 2005
32,783
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the wonder of the fractional reserve lending system, the 475B in Greek debt will mean AT A MINIMUM about 5 trillion will be removed from the European (and world) money supply...
Sounds like some kind of multiplier effect, eh. 5 trillion sounds like a large amount of money.
 

goodguy1977

Member
Jan 5, 2011
791
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16
I can't stand bnn, just a glorified commercial. Plus too many stupid vector vest commercials!

From analyzing the American real estate fall, that hole in the economy has just offset the effects of the massive liquidity pump. I don't think Europe will blow up but the massive "hole" that their economy will create will significantly effect the overall global economy. I think passive indexing will not be effective in 2012. Get ready everyone, investors wil have to become traders to generate gains in 2012.

What are your thoughts on the CAD real estate economy? Will the markets drive up rates (not the fed gover) and drive down prices of homes? Cap rates are extremely low, seems its all based on relative pricing. Also Can. unemployment on the rise, interesting. Any thoughts?
 

nottyboi

Well-known member
May 14, 2008
22,447
1,325
113
I can't stand bnn, just a glorified commercial. Plus too many stupid vector vest commercials!

From analyzing the American real estate fall, that hole in the economy has just offset the effects of the massive liquidity pump. I don't think Europe will blow up but the massive "hole" that their economy will create will significantly effect the overall global economy. I think passive indexing will not be effective in 2012. Get ready everyone, investors wil have to become traders to generate gains in 2012.

What are your thoughts on the CAD real estate economy? Will the markets drive up rates (not the fed gover) and drive down prices of homes? Cap rates are extremely low, seems its all based on relative pricing. Also Can. unemployment on the rise, interesting. Any thoughts?




i think the fed had rates covered and euro problems will cause a flight to us treasuries. but commodies could head down a hurt thr can economy....our real estate could also take a 20-30%hit
 

oil&gas

Well-known member
Apr 16, 2002
12,220
1,618
113
Ghawar
Marc Faber says the whole derivatives market will one day cease to exist

http://www.bi-me.com/main.php?id=55870&t=1&cg=4

December 22, 2011

Marc Faber the Swiss fund manager and Gloom Boom & Doom
editor recently discussed his 2012 predictions. In a nutshell, he expects
politicians in the US and the EU to keep on addressing symptoms rather
than dealing with the fundamental problems of the crisis.

He can smell more money printing and sees less prosperity - to the point
that within 5 years many investments could lose 50% of their value.

"You can increase debt but it doesn't increase prosperity or economic
growth," he says. He predicts the collapse of the derivatives market -
down to zero - and favors equities and gold.

QE3 and equities

Speaking in an interview with Jeanne Yurman of Reuters on the sidelines
of the IndexUniverse's 4th Annual "Inside Commodities"
conference held on December 8 at the New York Stock Exchange, Faber said:
"There is no doubt that QE3 will come in one form or the other, and in
Europe also".

"They will monetize," he stressed.

Because of impending additional quantitative easing, Faber, who predicted
the stock market crash in 1987 and turned bearish shortly before the
2007-2009 bear market, is less bearish on equities now.

If the S&P drops 10%-15% here [the US] and in Europe, "they are going
to print money," he predicted.

Addressing symptoms: The limit of Keynesian policies

Faber sees more can-kicking and more avoidance of real solutions through
additional fiscal deficits and money printing in 2012.

"When the EU [and the eurozone] were formed, in the Maastricht treaty it
was stated that no country should have a fiscal deficit of more than 3%
and the debt to GDP ratio should not exceed 60%, but nobody kept that
promise, Faber reminded his host.

The first one to violate [the rules] was Germany, he added.

When you look at what happened subsequently where countries had
huge expansions in debt/GDP, you have to ask yourself what did these
bureaucrats do all day? asked Faber.

The renowned investor clearly disagrees with Keynesian policies that
seek to get out of the crisis caused by too much borrowing and spending
by spending and borrowing even more.

The limit of these [Keynesian monetary] actions has been reached
he said. You can increase debt but it doesn't increase prosperity or
economic growth, because there is a point where the excessive debt growth
doesn't stimulate economic activity any more, but it does create bubbles
in different sectors of the economy.

And because we're in a global economy, the intended consequences
of the actions may not even happen in the US. "Mr. Bernanke's monetary
policy was designed to lift the housing market. The only asset that
didn't go up since 2008 is housing."

Banks are so leveraged

Asked about his view on European banks, Faber said they will need more
than US$153 billion to restore confidence. He was referring to documents
from the European banking regulator stating that Europe's banks will
need to raise 114.7 billion euros (US$152.8 billion) in fresh capital as
part of measures introduced to respond to the euro area's sovereign-debt
crisis.

German banks need 13.1 billion euros and Italian banks 15.4 billion
euros in core tier 1 capital, the European Banking Authority (EBA)
said in a document published early December.

"The banks are in a very bad shape because they are so leveraged. US
banks are also leveraged through the derivatives markets and so forth,"
Faber told Yurman, adding that he was very bearish.

The European Central Bank announced December 21 it will lend eurozone
banks 489 billion euros (US$645 billion), more than economists forecast,
for three years in its latest attempt to keep credit flowing to the
economy during the sovereign debt crisis.

It will go down to zero

You can postpone the problems with monetary measures for a long time,
but you can't solve it, Faber noted.

Adding to his repertoire of gloomy predictions, Faber said: "I am
convinced that one day the whole derivatives market will cease to exist,
will become zero."

"Greece should have defaulted; it would have sent a message that not
all derivatives are equal because it depends on the counterparty."

Europe solution

Speaking to India's NDTV December 14, Faber reiterated his 'Europe
solution': "Any country can exit the Eurozone if they want to. If
countries like Greece or Portugal leave the Eurozone, they could have
local currency and the economy would be based on the local currency. Hence
for international transactions, they might use the euro. However,
the losses would be very substantial because they would default on
their debt."

"It would still be a correct solution because the market is already
telling you that Greece is bankrupt and these countries can't pay
their debt. So, that is all they can do to monetize or acknowledge the
problem. Thus, the best way to acknowledge the problem for the weak
countries is to leave the Eurozone," Faber added.

How can investors prepare for a potential global collapse?

"We don't know how the world will look like in the next five years
because we are not dealing any longer with free markets but with markets
that are distorted by continuous intervention by the government. So,
making any prediction is very difficult," Faber said.

"My advice would be to diversify 25 per cent of your assets in real
estate, 25 per cent in equities and 25 per cent in cash and bonds and
25 per cent in precious metals."

The Gold price is cheaper today than 10 years ago, although in nominal
terms it is up 4-5 times, Faber argued in a recent interview.

"But compared with the monetary base, compared to government debt,
compared to the increase of wealth in the world, and compared to the
increase in international reserves, the gold price today is low."

What do other experts think of gold?

The price of spot gold bullion was little changed Thursday morning in
London, easing back from US$1,610 per ounce after yesterday's sharp spike
and pullback in what dealers again called "thin" trade ahead of Christmas.

"There has been a lot of disappointment with gold in the fourth
quarter, especially from those who were banking on the metal's safe
haven properties, given the escalating situation in Europe," says UBS
strategist Edel Tully, quoted by the Financial Times.

Gold bullion will fall below US$1,500 per ounce during the next three
months, according to a poll of 20

hedge fund managers, economists and traders conducted by news agency
Reuters.

"You're looking at Euro weakness, rather than anything else, as the
driving force behind the sell-off [in gold bullion last week]," reckons
David Jollie, analyst at Mitsui Precious Metals, adding that many traders
will be reluctant to buy gold so close to the end of the calendar year.

"Whatever your [longer-term] view, you have to ask what the chances are
of making money by the end of the year...that says to a lot of people
that this is not a market to get longer in.
 

Rockslinger

Banned
Apr 24, 2005
32,783
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I think that the banks should get rid of all this derivative shit:mad: and get back to core banking. I don't think the banks cumulative profits for the past 100 years from corporate banking is zero or minus. They need to run banks like utilities and/or like Rogers and Bell.
 

nottyboi

Well-known member
May 14, 2008
22,447
1,325
113
I think that the banks should get rid of all this derivative shit:mad: and get back to core banking. I don't think the banks cumulative profits for the past 100 years from corporate banking is zero or minus. They need to run banks like utilities and/or like Rogers and Bell.
Derivatives do serve a useful purpose and have a legitimate place in the financial markets. However, like so many things, their use has become distorted by those who seek to enrich themselves by financial engineering. I think they should be allowed, but only for buyer with a real need to hedge for their core business. The resale of futures without taking delivery should be taxed.
 

msog87

Banned
Dec 11, 2011
2,071
1
0
expect qe3, and expect the EU to kick the can down the road. the overall stock market will rise due to weaker currencies causing inflation, however commodities will outperform
 

Rockslinger

Banned
Apr 24, 2005
32,783
0
0
RIM will adopt the "IBM Model" and transform itself into a services company. No more hardware crap. Stock rises to $50 by year-end 2012.
 
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