Dose any one remember what is was like to live in Japan in the 1990s ?
Well I do the Nikkei was going up up and even highr beond belief at one point the Index reached nearly 40,000 today Just over 8,000.
If one could live in the center Tokio they were extreamly rich.
Now 15yrs down the line we have expieranced a massive increase in property prices and also seen deflation on white goods in the early 2000s.
My point here is 40,000 on the Nikkei in the 90s and 8,000 today.
Currently Asia has the upper hand and not Europe and USA. In Asia there are highr cost of living and higher wages to pay, people used to ride bikes to work now they drive cars, people used to eat rice and peas now they eat pork and chicken.
Markets like everything go through cycles. Econamyies go through cycles. yes we have low intrest interest rates and they are here for another 3yrs to come at least.
For decades the pension funds Mrs Jones has been paying in to has seen its value plummet equallying they have less to spend on retirement (5-10yrs down the line ) For the pensioners of today intrest on thier savings has dissapeared to near zero so they have less to spend.
Markets price almost everything in to the current value, however consumer confedence is everything this is a very important message to all reading this thread.
Untill confedence comes back and there is not another war Markets will be treading water.For how long ? I hear people thinking Japan 225 is the answer.
When Japan had there crisis itrest rates went below zero, yes that ment that the bank of Japan paid people to borrow to rebuild the economy, we are not even close to this yet.
The now trillions been piled into backing failing car companies, banks and other business's will not make any diffrence because if these car companies coul not genarate revenue when times were good how are they coming to do it when times are hard ?
As for Banks well they are a law on to there selfs, they pay 0.5 % on standard accounts in credit then charge 18% when we go over drawen. These banks borrow at say 1.3% and pass there cost of borrowing on at 4% or above, this is a solid money making business's. So what went wrong ? All Banks and business's need to out perform the other one to generate better share holder intrest. Currently banks are scared to take postions in the market so competion is at a stale mate = no share holder intrest= plateu prices.
This again boils down to consumer confedence.
Mark to Market, what a farce ?
When banks relised that the value of securities was below forcast there balance sheets deteriated. Barclays was given a clean bill of health due to them having just 50 mill above the limmit for bail out. Come on this is another scam, FSA now advise that Mark to Market is no longer required, so that 200,000 loan that was woth £150,000 can now be worth £250,000 or what ever the banks decided to value it at.
Again this is a mirror image of how the clapse of Nikkei 1990s
Sorry for been so boring in this statement, we must still be extreamly cautouse, Long above 8000 DOW and 800 S+P as for anything else Im sitting tight untill things get better or a bull market starts.
We have a new presedent in USA so everything points to higher prices, do not get caught out.
Tom
Well I do the Nikkei was going up up and even highr beond belief at one point the Index reached nearly 40,000 today Just over 8,000.
If one could live in the center Tokio they were extreamly rich.
Now 15yrs down the line we have expieranced a massive increase in property prices and also seen deflation on white goods in the early 2000s.
My point here is 40,000 on the Nikkei in the 90s and 8,000 today.
Currently Asia has the upper hand and not Europe and USA. In Asia there are highr cost of living and higher wages to pay, people used to ride bikes to work now they drive cars, people used to eat rice and peas now they eat pork and chicken.
Markets like everything go through cycles. Econamyies go through cycles. yes we have low intrest interest rates and they are here for another 3yrs to come at least.
For decades the pension funds Mrs Jones has been paying in to has seen its value plummet equallying they have less to spend on retirement (5-10yrs down the line ) For the pensioners of today intrest on thier savings has dissapeared to near zero so they have less to spend.
Markets price almost everything in to the current value, however consumer confedence is everything this is a very important message to all reading this thread.
Untill confedence comes back and there is not another war Markets will be treading water.For how long ? I hear people thinking Japan 225 is the answer.
When Japan had there crisis itrest rates went below zero, yes that ment that the bank of Japan paid people to borrow to rebuild the economy, we are not even close to this yet.
The now trillions been piled into backing failing car companies, banks and other business's will not make any diffrence because if these car companies coul not genarate revenue when times were good how are they coming to do it when times are hard ?
As for Banks well they are a law on to there selfs, they pay 0.5 % on standard accounts in credit then charge 18% when we go over drawen. These banks borrow at say 1.3% and pass there cost of borrowing on at 4% or above, this is a solid money making business's. So what went wrong ? All Banks and business's need to out perform the other one to generate better share holder intrest. Currently banks are scared to take postions in the market so competion is at a stale mate = no share holder intrest= plateu prices.
This again boils down to consumer confedence.
Mark to Market, what a farce ?
When banks relised that the value of securities was below forcast there balance sheets deteriated. Barclays was given a clean bill of health due to them having just 50 mill above the limmit for bail out. Come on this is another scam, FSA now advise that Mark to Market is no longer required, so that 200,000 loan that was woth £150,000 can now be worth £250,000 or what ever the banks decided to value it at.
Again this is a mirror image of how the clapse of Nikkei 1990s
Sorry for been so boring in this statement, we must still be extreamly cautouse, Long above 8000 DOW and 800 S+P as for anything else Im sitting tight untill things get better or a bull market starts.
We have a new presedent in USA so everything points to higher prices, do not get caught out.
Tom
