Stocks, Forex and Other Money Matters

As investors welcomed the less-than-feared stress-test results and their hopes for an early economic recovery mounted, they drove up the prices of risky assets such as equities, oil and commodities, precious metals, emerging-market bonds and currencies, and high-yielding corporate bonds. On the other hand, traditional safe havens like developed-market government bonds and the US dollar experienced selling pressure.

With investors’ confidence being buoyed up, the CBOE Volatility Index (VIX) declined by 9.2% during the week to 32.1 – a far cry from more than 80 in October and a sign that markets are returning to more normal behavior.

Read more about this, together with some thought-provoking news items and quotes from market commentators during the past week, in the weekly “Words from the Wise” review:
http://www.investmentpostcards.com/2009/…http://www.investmentpostcards.com/2009/05/10/words-from-the-investment-wise-for-the-week-that-was-may-4-%E2%80%9

Popularity: 7% [?]

A long-awaited reversal in the monumental global stock market rally since early March finally arrived last week. As the first-quarter earnings season started winding down and post stress-test capital-raising weighed on some banks, investors were faced with a slew of gloomy economic reports suggesting the recent optimism about a global recovery might have been premature.

“Less bad” economic reports provided investors with little comfort, sparking a reassessment of their risk appetite and leading to profit-taking on most bourses. Also, commodities retreated after recording four-month highs earlier in the week, and high-yield corporate bonds and emerging-market currencies came off the boil. On the other hand, safe-haven assets such as government bonds, gold bullion, the US dollar and Japanese yen attracted buying.

Read more about this, together with some thought-provoking news items and quotes from market commentators during the past week, in the weekly “Words from the Wise” review:
http://www.investmentpostcards.com/2009/…http://www.investmentpostcards.com/2009/05/17/words-from-the-investment-wise-for-the-week-that-was-may-11-%E2%80%9

Popularity: 5% [?]

Dr. Doom: Capitalism Could Fail Like Communism

By: CNBC.com | 15 May 2009 | 04:09 AM

A sustainable recovery will occur only when the corporate system will be cleaned of losses and capitalism risks collapsing if this does not happen, Marc Faber, the author of “The Gloom, Boom & Doom Report,” told CNBC Friday.

The central banks will continue to print money at full speed, but long-term this strategy will lead to a fall in purchasing power and living standards, especially in developed countries, Faber said.

The years 2006 and 2007 were “the peak of prosperity” and the world economy is not likely to return soon to that level, he added.

“I think the final low in markets will occur when the system is cleaned out,” Faber said.

Unless the system is cleaned out of losses, “the way communism collapsed, capitalism will collapse,” according to Faber. “The best way to deal with any economic problem is to let the market work it through.”

US Will Go Bust

The Federal Reserve’s policy of printing money is destabilizing the markets and creating “enormous volatility” said Faber, who in his latest “Gloom, Boom & Doom Report” wrote that it was money printing that had pushed stock prices up.

“The US government for sure will go bust. That I guarantee you. Not tomorrow, but it will go bust,” he added.

US government bond yields bottomed out in December 2008, he said.

“I think this is the beginning of a long-term bear market. And I think the government will have to keep interest rates artificially low because deficits will be too high,” Faber said.

As for the recent rally in the stock market, most investors missed it because they focused on the economy rather than look at the technicalities.

“People said fundamentals are bad and markets are going up for no reason. But money printing is a reason,” he said, explaining why quantitative easing will continue.

“The worse the statistics will be, the more money will be printed. Believe me, globally all the central banks will print money like there’s no tomorrow.”

Will it happened?
Keep money in bank die..buy stocks also die.. how?
buy gold and commodities..

Popularity: 4% [?]

Growth in India’s automobile manufacturing market is expected to be world no. 1 during 2006-2011, according to Price Waterhouse Coopers.

Only one person out of every 1,000 in India owns a car. The ratio is 450:1000 for the US and 1:2 for Western Europe.

India’s auto vehicle sales is set to rise to 2 million units by 2012, said JD Power & Associates. This against a backdrop of cars being considered a luxury only less than a decade ago.

India produced 1.36 million passenger cars in 2005. Manufacturers expect production to hit 3 million by 2012.

Compact hatchbacks are most popular in the country, where models like Hyundai’s go for US$7,000. Home-grown Tata Motors wants to redefine market rules with the advent of its US$2,500 car.

Popularity: 48% [?]

Obsolete electronics require professional disposal because of the health and information security issues that crop up.

End-of-life-electronics are hazardous because they can contain lead, mercury, chromium, cadmium, beryllium, nickel, zinc, and brominated flame retardants.

Furthermore, not-for-profit groups are careful about the types of obselete equipment they accept because of the responsibilities such as the security of the personal and financial information stored on hard drives, and operating systems unaccompanied by software licenses.

Two stocks listed on the Singapore Exchange dealing with e-waste include Centillion and Enviro-Hub.

Popularity: 26% [?]

Chinese finance institutions with immediate effect, may apply for licenses to invest outside China, said China Securities Regulatory Commission, the nation’s security watchdog.

CSRC said about 20 funds in China meet the standards to be qualified domestic institutional investors (QDII).

Criteria for asset management firms include
* Net assets more than Rmb 200 million (US$26 million)
* More than two years of operational experience

Criteria for brokerages include
* Net assets more than Rmb 800 million
* More than one year of investment management operations

China’s State Administration of Foreign Exchange (SAFE) recently approved a US$20.5 bn QDII quota – US$14.8 bn for 19 banks, US$5.2 bn for four insurance companies and US$500 m for one fund management company.

Hong Kong is favored by most funds from the Chinese mainland as they are more familiar with the market environment there and the risks are comparatively lower, said dealers.

A senior analyst with the Bank of China (Hong Kong) said the QDIIs would attract money into the Hong Kong stock market.

For investors, QDII investments provide diversification options but returns must exceed yuan appreciation to be more attractive than shares listed on China’s stock exchanges.

Popularity: 24% [?]

Toyota sold 8,808,000 vehicles in 2006, compared to General Motors’ 8,679,860, ending GM’s reign as No. 1, said Detroit-based weekly Automotive News on 12 Jun 2007. Automotive News Data Center publishes a widely quoted ranking of the world’s automakers.

Popularity: 23% [?]