SOS Wealth Destruction in Malaysia

MARKET CAPITALIZATION IN USD DOLLAR (1997 to 2011)

1997 KLSE index is around 1400 (RM1.05 trillion or USD420 billion @2.5)

March 2011 KLSE index is around 1526 (RM1.13 trillion or USD375 billion @3.0)

It means over the last 14 years, market capitalisation has dropped 11% in US dollar terms.

MARKET CAPITALIZATION IN GOLD (1997 to 2011)

Gold in 1997 (USD350 per oz)

Gold in March 2011 (USD1429 per oz)

In 1997, Malaysia can buy about 1.2 billion oz of gold

March 2011, Malaysia can buy only about 262 million oz of gold

That means, if I bought RM10,000 worth of gold in 1997, I will get about 11.42 oz of gold

If I kept the gold until today, I convert it back to RM, I will get RM49,284 (11.42 oz x 1429 x 3.02).

MyView

Should I kept some gold in 1997, my RM1.00 will become RM4.93 today (2011 March), in 2010 I will get around RM4.11 dollar.

Not a bad idea to accumulate gold over time as part of one's portfolio looking at current situation, most government is stimulating their economies. Of course, that does not mean that gold price won't drop back to USD350 per oz, then, your RM1 will get you back RM1 in 14 years time. So, you have to weigh the pro and con of owning gold.

What if you bought gold in 1980 at USD800 per oz. RM10,000 can buy about 5 oz of gold, today, after 31 years, you will get RM21,600. That means, worst case, after 31 years, your money only doubled or compounding of about 2.8% p.a. Assuming you are the dollar cost averaging type, I figure your if you buy from 1980 to 1997, it drop from USD800 per oz to about USD350 per oz, your average cost is say USD575 per oz.

So, if you average cost is about say USD575 per oz (buying from USD800 to 350 per oz from 1980 to 1997) , your RM10,000 can buy you about 6.95 oz of gold. Today it is about RM30,000.

The worst case if you bought gold in 1980 and sell it 0n 1997, your RM10,000 will become RM4,375, and then become RM21,600.

Let say you average from 1980 to 2011, gold drop from 800 (1980) to 250 (2001) t0 1430 (2011 march) your average price of gold is USD737 per oz.

The moral of the story is it depend at which stage you bought gold, worst case if you started since 1980 (historical high of gold), your average is USD737 per oz.

SOS How much Fed can monetize IOUs

WILL FED BE ALLOWED TO MONETIZE ALL IOUs?

"I have long predicted that the trend toward negative social mood will unleash political forces that will keep the Fed from monetizing all the debt currently outstanding. I don’t think it will be allowed to monetize all the credit card debt, auto debt, mortgage debt, bank debt, city debt, county debt, state debt, corporate debt and derivative-triggered debt. Political pressures kept the Japanese central banks from doing it, and similar pressures are mounting in the U.S." said Robert Prechter

The total private debt to be monetize is about USD42 trillion in 2008, by now (end of 2010), it is about USD60 trillion. Will the American allow Fed to do that? In Japan's case, she can't. What about the unfunded social security and medicare, say another USD50 trillion. And what about the derivatives, which is not mentioned, about USD250 trillion (USA alone)

MONEY PRINTING MYTH

EWI president Bob Prechter explained in a June 2010 interview why the term "money printing" is a misnomer: "To begin with, the printing analogy is flawed. The Fed does not operate a press, as the government of Zimbabwe did. It creates new money only when it buys IOUs. This may seem to be a distinction without a difference, but it’s actually very important. ... Even if the Fed were to monetize every dime of currently outstanding, dollar-denominated debt, it would create no net inflation. The money-plus-credit supply would be the same."

So, did CHINA print USD800 billion during the 2008/9 crisis?

MyView

Think about it from the perspective of money-plus-credit supply. What about Japan government debt increase to 200% of her GDP? Why then the yen did not become toilet paper?

SOS China Housing Next to Crash!

Some of the facts from James Chanos (he is a year or two early, as usual):

1. Supply over demand in a big way;


2. Broken window policy, tear down a city and rebuild;


3. Prices in Shanghai and Shenzhen is 40x its household income;


4. Many rich own few units, disregards yield and hoping for capital gain;


5. 60-70% of GDP in China is construction;


6. Bank credit growth is about 35%, guess where did it goes, state governments (of course there is arguement that consumer paid 30-40% deposit);


7. China stimulus is about 14% its GDP (USD4trillion), one of the largest in term of percentage, chances are high for misallocation of resources;


8. Fixed asset investments are too huge for comfort i.e. properties, which do not generate cash flow if unoccupied;


9. Similar things happen in Dubai, build it first, the demand will come;

MyView

"This time is different" theory is incorrect. What is the justification of investing for capital gain when supply exceed demand? Properties never drop? That is exactly said in USA, prices of properties had not drop over the last 63 years. What about Japan in 1989? Demand will fill up the empty building and overprice building? Japan will continue to grow perpectually? What about Dubai?

Well, it is just another "musical chair" game. Well, some takes longer to stop, that is all, but they eventually stop, one way or another. I think the trick here is not so much it takes 63 years to pop like in USA, USA prices double to triple in 2000-2005, couple with a lot of derivatives. Japan land prices tripled from 1986 to 1991.

The problem is that when the music stops, the speculators/gamblers will be in for a shock. Not many area that a Chinese can put their money anyway (stocks or properties). One may argue, most Chinese paid 30-50% cash deposit, hence, no worry, well, yes, they can enjoy the music longer than others that's all. What happen if they are unemployed, can they live in 5 unoccupied condos?

Centralised planning is good? It only takes 9 elites in China to make the government policy, how efficient is that. American takes 10 years to build a bridge, China takes 3 years.

Urbanisation will solve the problem? Well, lets do more research on this.

SOS Why debt should implode in USA?

I provide the statistics, you do the thinking.

FACT #1

Statistic on USA

2000 to 2008

1. Fed Govt debt increase USD5trillion to USD10 trillion


2. Private Debt increase USD20 trillion to USD42 trillion


3. Privated Debt (42T) comprised of Financial Debt (17T)+Corporate Debt(11T)+Consumer Debt (14T)


4. Unfunded Social Security and Medicare is about USD46T in 2008


5. USA derivatives about USD200-250 trillion (world is about USD600 trillion)

2008-2010 (to be updated soon) - I believe couple of trillion here and there.

Japan land price increase 3 times from 1986 to 1989

USA land price increase 3 times from 2000-2005

FACT #2

Home affordibility ratio:

Australia 7x

Mumbai 10x

China (Shanghai and Shenzhen) 40x

Singapore 26x

(This ratio is taken from a blog, handle with care)

FACT #3

During the 2007 to 2008, US dollar appreciate about 20% (please recheck) against major currency, and the following collapse (different timing)

• Stock market (around the world)


• Commodities market (around the world)

FACT #4

2011 - GOLD reach new high, SILVER reach new high, OIL reach USD106 per barrel, lot of commodities (Copper, corn, sugar, soya) reach new high and at the same time, US dollar reach its historical low.

MyView

Could it be CARRY TRADE in US dollar like Japan? Could Fact #1 points to debt implosion is far greater than government printing of money (larger than it could handle)?

Could Fact #2 ignites a SECOND TSUNAMI from the property bubble from Emerging Market?

Could Fact #3 reverse, i.e. US dollar reverse from the current historical low? Don't forget, Japan went into the following scenerio before during the 1989 crisis, people thought the printing of money by Japan government will turn yen into toilet paper (but it became stronger since)

Would it be so simple, at the moment, the majority (even a common person on the street) could explain that the printing of money will cause hyperinflation? So, buy gold and silver, commodities and don't keep cash. In the financial history, we only see that when gold and silver has a negative correlation with stock market, and why does this time round it turn positive?

Well, the world economics is dynamic, but, debt creation is TANGIBLE, properties oversupply is TANGIBLE, commodities price spike beyond supply and demand is TANGIBLE, how else could we explain why all asset classes increase will US dollar depreciates.

If Japan needs to reconstruct its countries, it would need new funding outside Japan because Japan trade surplus will shrink over the next few years, and foreign funding for Japan will be more expensives, guess what denomination of funding Japan must issue, I think most likely is US dollar (hmmm, a new demand for US dollar).

Recently China is reducing its US dollar reserves, but Japan maintain its US dollar reserves. Could it be Japan has seen this before (DEBT DEFLATION)?

Give it a thought and do more research. Because, if one read it correctly, one can protect its own wealth.

SOS Collapsing Dollar

In 1985, the Japanese Yen traded between 250 to 300 yen per US dollar. When they enter the crisis in 1989, most people believe that yen will become banana money when the government started printing like crazy to bailout, to stimulate, to rebuild, to do all sort of things.

After much of the printing, today, Japanese government debt is 200% its GDP. And guess, what is yen today against US dollar, it is 81. How the heck when bubbles collapse in Japan (property and stocks), and with the crazy printing of money by the Japanese yen, from 1990 to 2010, and yet the yen appreciate.

Of course, one argument would be Japanese has huge trade surplus during the last 20 years (arising from its export).

The question one would ask is, how did the yen appreciate when the government is printing and bailing out all the zombie banks in Japan? Of course, this does to tell us that going forward yen would depreciate (for reconstruction of the Japan arising from the tsunami). Of course, between 1990 to 2010, yen was fluctuating between 85 to 145, but still it is higher than the post 1990.

What if you put the Japan scenerio into USA today. Can US dollar collapse (in medium and long term) because of the money printing just like Japan? Bear in mind, USD government debt over their GDP is a lot lower than Japan.

MyView

Actually this is the issue of printing of money and implosion of debt (which will decide inflation and deflation). If the rate of printing of money is far greater speed than the implosion of debt, then inflation will occur. On the other hand, if the implosion of debt (credit shrink and debt turn bad) is far greater than the printing of money, then a deflation will occur first, before inflation can happen.

However, before time will tell us the story, the investors/speculators (crowds) will perceive whichever way they like, hence causing an extreme volatile movements in the financial markets, such as stocks, commodities, and other financial papers (perhaps just like Japan, the yen fluctuate between 85 to 145 after the crash)

If the USA play out like Japan, where the debt implosion seems to cause Japan in a delation and depression mood for the last 20 years, then, US dollar will appreciate in medium and longer term. But before it happen, the market will be volatile, as the market emotion will set the volatility. However, if we look at it from a credit creation perspective over the long run, the debt implosion will outpace the money printing, because, the world still have about USD65 trillion of debt yet to turn bad, excluding the world derivatives of another USD600 trillion, where some of it will turn bad. So the debate will goes on and on, inflation vs deflation.

Don't forget, US took 20 years to build up it crazy debt level today, so for the next decade, it is not difficult to assume that debt will shrink, and implosion of "ponzi" debt in the banks.

So, do we think that US dollar will collapse (in the new term, meaning 6 to 12 months?). The collapse is merely a perceptions of all the crowd/investors perceptions. The DEMAND and SUPPLY will eventually tell prevail. So, looks of premium or discount will be discounted in the financial markets. As usual the markets always fool the investors/crowds.

What happen to the Japanese carry trade? Surely, they will reverse one day, which it did. Now, we are talking about US dollar carry trade, surely one day it will reverse, but how soon? That is a timing questions, which fundamental analysis will not be able to measure.

SOS Japan Disaster Part 2

Some interesting facts:

Japanese Yen vs US Dollar

1985 250

Dec 88 - Apr 90 123 - 158 Depreciate 30%

Apr 90 - Apr 95 158 - 84 Appreciate 46%

Apr 95 - Aug 98 84 - 145 Depreciate 72%

Aug 98 - Dec 99 145 - 103 Appreciate 29%

Dec 99 - Jul 07 103 - 122 Depreciate 18%

Jul 07 - Mac 11 122 - 81 Appreciate 34%

Mar 11 - 2012 81 - ?? According to Gary Shilling, it will depreciate

Gary Shilling think that it will appreciate because the trade surplus will shrink mainly due to the tsunami in March 11. Export will reduce, import on material will increase resulting from the reconstruction of Sendai and Fukushima, which is more than USD300 bil. Japan will need more USD for the import and the reconstruction.

MyView

It is an interesting trend from Japan prior and during the deflation era. During the Peak around mid 85 is about 375 yen per US dollar, lowest after the tsunami is about 74. But in between, there are so many UP, DOWN, UP, DOWN (resulting from trade surplus and stimulus as well as CARRY TRADE).

One wonder what will happen for the US dollar? Same fate as Japan?

SOS What happen to Yen since 1989?

One must be wondering what happen to the Japanese Yen since the 1989 crash. It depreciates at the initial stage of bust in 1989, and then over the next 5 years, it actually appreciates from about 150 to about 80, rebounded to 130 and up to today 2011 March, it is about 82. Over the entire crash, about 21 years, yen has appreciated from 150 to 80 per US Dollar even with the public debt increase up to 2 times the GDP. Who could have thought that? Does that mean, printing money will eventually makes the yen worthless? Will US dollar facing the same problem, so far, not. Or not yet? Perhaps, USA is more resilient. Who would have tought, with a same Yen today held from 1989, a Japanese can buy twice as much as Nikkei which drop from 1989 to 2011, from 39000 to 9000. MyView It may be worth studying what was faced by Japan against USA today. Both are going through immense bubble (different intensity) burst, and also post bubble stimulus. Funnily, up to today, USA is doing better than Japan. Japan bubble created from 1985 to 1989, stock market tripled. Property also tripled. The only difference, Japan export was good during the post bubble. The trillion dollar question, can the credit deflation makes the stimulus look like a drop of blood in the ocean, and the deflation wave would wipe the stocks and property markets. Only time will tell.

SOS Coming Crash?

Great Things are Ahead for This Country!
But only after the Coming Crash ......by Jim Shepherd (referring to USA)

Remember, winning is great.... but avoiding loss of capital is paramount!

So what is behind this rally? Certainly it has been helped by a wave of liquidity from near-zero interest rates and quantitative easing. But a more important factor fueling this asset bubble is the weakness of the US dollar, driven by the mother of all carry trades.

The US dollar has become the major funding currency of carry trades as the Fed has kept interest rates on hold and is expected to do so for a long time. Investors who are shorting the US dollar to buy on a highly leveraged basis higher-yielding assets and other global assets are not just borrowing at zero interest rates in dollar terms; they are borrowing at very negative interest rates...

Every investor who plays this risky game looks like a genius — even if they are just riding a huge bubble financed by a large negative cost of borrowing..

...This policy feeds the global asset bubble it is also feeding a new US asset bubble...The reckless US policy that is feeding these carry trades is forcing other countries to follow its easy monetary policy... This is keeping short-term rates lower than is desirable... So the perfectly correlated bubble across all global asset classes gets bigger by the day.

But one day this bubble will burst, leading to the biggest co-ordinated asset bust ever: if factors lead the dollar to reverse and suddenly appreciate... the leveraged carry trade will have to be suddenly closed as investors cover their dollar shorts. A stampede will occur as closing long-leveraged risky asset positions across all asset classes funded by dollar shorts triggers a co-ordinated collapse of all those risky assets — equities, commodities, emerging market asset classes and credit instruments." ("The Mother of all Carry Trades Faces an Inevitable Bust," Nouriel Roubini, Financial Times.)

Everyone who watches the market has noticed the inverse correlation of stocks to the dollar. When the dollar fades, stocks soar. And when the dollar strengthens, stocks plunge. Eventually, the dollar will reverse-course and stage a comeback, probably when Bernanke stops his printing operations. That will trigger the next severe correction which will burst bubbles across all asset classes.

Bernanke's success in reflating sagging asset prices has depended entirely on interest rate manipulation and liquidity injections. There's been no effort to patch household balance sheets, increase production, or strengthen overall demand. It's a clever trick by a master illusionist, but it has its costs. When the dollar rallies, markets will crash. And Bernanke will be responsible.

MyView

Carry Trade. Derivatives. Asset Bubble. QE. The question is when will the MUSIC STOP.

SOS Stocks vs. hard assets, commodities and US housing

"The One Chart to Rule Them All"
Study the chart carefully, it may explain a story.

Facts for thoughts on important statistics:

USA private debt that may default: USD65 trillion
World derivatives: USD600 trillion (part of it may become bad)
Socialcare and medicare in USA : xxx trillion

MyView

Some other scary facts in China is the debt growth (including shadow banking) is about 35%. China is constructing about 30 billion sq ft, more than enough for each citizen to stay. Construction comprises 70% of their GDP, primarily explain that too much of fixed assets investments (buildings) which are not economically productive. There are many empty units and also, secondary sales is insignificant. Most will hold a few properties with the hope of prices will go up. When China slows, resources producing countries will suffer.

Economies do not move in a linear. That is almost for sure, but, consensus think in linear, that is the problem. Most economists misses in their forecast because they use the same tools to measure them, and their tools is almost unreliable. So this will continue, history does not repeat, but it ryhms.

SOS This time is Different!

This time is different! That is what the consensus (on the financial) said on the USA economy.

The USDollar is a toilet paper. The amount of money they printed in QE1 and QE2 by the Fed amount to trilliion and floods the market, and it may turn into an ugly inflation or even hyper inflation. GOLD, according to the CEO of Goldcorp, he is confident that it will rise to USD5000 per oz in 3-4 years time. He even pointed out that recently central banks are net buyer of gold, pointing to China, India, Russia, Iran and other countries to realign their reserve portfolio. Government will try to maintain interest rate at all time low to allow their economy to nurse themselve back to the sustainable growth. Most fund managers believe that the stock market is the place to be in and has lots of room to move up as the economy improves. Crude oil will eventually revisit USD147 per barrel due to lack of supply and increase demand by China and India. Real Estate has stabilised and expected to move up soon.

The consensus of the following:

U.S. dollar - DOWN OR CRASH
Interest Rates - REMAIN LOW OR DOWN
Stock market - UP
Inflation - UP
Crude oil - NOWHERE TO GO BUT UP
U.S. Economy - UP
Real estate - UP

Well, one has to watch out when consensus thinking at its peak, the REVERSAL may happen. Could this be a signal of reversal. If you say otherwise, the concensus will bury you alive, especially at the moment. They will give you every single fundamental reason to support their arguement and validate that their CONSENSUS thinking of the market is absolutely CORRECT. Don't waste your time to argue otherwise.

MyView

We shall see. Lets do a little mathematic here, when was the last time you here 95% of the consensus will make lots of money and the 5% who do not listen to the consensus will go broke. Some may say, don't swim against the tide, you will be swept away. History has proven, it is the 5% that holds 95% of the wealth. What has change? Like a casino, what is the chance that a casino lose?

What about Malaysia? If you tell people real estate price will go down, you will have a hard time convincing them, each arguement you bring out, they will drown you with 5 other arguement that the prices will go up. So the CONSENSUS is clear. It is the same CONSENSUS on the Bursa Malaysia, it is undervalue, sure it will go up.

So the question is can the CONSENSUS be right for a long run? Or should it be rephrase, 95% of world population will eventually be rich, only 5% will be poor? The CONSENSUS will say, this time is different!

SOS Japan Disaster!

Only 2005 & 2009 - no earthquake
From 2004 to 2011 - there are 6 earthquakes out of the 8 years

Without government bailouts and sweetheart deals arranged, quid pro quo, with insiders and corrupt bankers; Buffett’s track record would suck. Why does anyone listen to this guy whose sole talent is fluffing Charlie Munger (said MaxKeiser)

Bill Gross of Pimco predicts doomsday on July 1, 2011, when the QE2 ends.

2007 to 2011
Gold price up from USD800 to USD1400 per oz up about 75% (4 yrs)
In RM terms, it goes up about 46% (4 yrs) because RM appreciated from 3.65 to 3.05 per USD

David Morgan, in the short run (2nd or 3rd quarter of 2011) will correct to USD24 per oz from the current high of USD36 per oz.

SOS Marc Faber Says on March 15, 2011

On CNBC 15 March 2011

1. world stock markets and commodities is due for meaningful correction after double in the last 2 years


2. if meltdown occurs in Japan, the devastation is mind boggling for the human lifes and financial condition for Japan


3. S&P 500 may drop from peak of 1344 for 10-15% (to 1140) and then QE3 and QE4 will be introduced


4. Crude oil from the reward risk perspective, demand will goes up, if Middle East blows up, there will be short of supply


5. Marc Faber think it will be WWIII (worst case) due to Middle East problems

DJIA in terms of GOLD has todate dropped drastically since 2008.

DJIA say in peak of 2007 is 13000, gold is 1000 per oz = 13 times gold per oz

Today, 2011 March 18, DJIA is 11,900, gold is 1420 per oz = 8.3 times gold per oz

MyView

Perhaps it is good to measure DJIA in term of CRB Index, meaning each DJIA point to buy each CRB Index point. However, although this measurement will indicate the which Asset Class is better, don't forget, both DJIA and CRB Index does not reflect the fundamental of the demand and supply, but merely the buying and selling of financial papers by GROUP of investors/speculators. This measurement however do indicates the relative purchasing power of DJIA in term of CRB points. Worth a while to calculate this ratio over a long period of time.

Allocations of cash into which asset class is very important. Hence, an indepth study on which asset to allocate is a worthwhile effort. Say if I were lucky enough to invest in gold at USD250 per oz in 2000, now it is USD1400, i.e. almost 6 times or 600% gain in 10 yrs. I suppose, one have to be quite a contrarian to do that and very very patient about it.

Say now, if an investor shorted stocks in 2010, although he/she is entirely wrong in 2010 (for a year), what will he or she get in 2015 or 2020? Just like gold, if you buy gold in 2001, it really didn't move between 2001 to 2005, that means, you can be wrong for 1-5 years in a row because gold is moving between USD300 to 400 per oz. Of course you will still be leaking your wounds if you have bought gold in 1980 at about USD800 per oz. Meaning, at today USD1400 per oz, an increase of ONLY 75% over 30 years, BAD BAD BAD investment indeed. So, TIMING is another crucial element here.

At the current printing of money by both USA, Europe, China and the rest of the world, it is hard not to believe in the long run i.e. 5-10 years, gold will continue to move up. So the main ingredient is the same, patient and right allocation. Near term, correction may happen. So a regular investment in gold is not a bad idea, every quarters, perhaps?

Before one gets there, one must be very very patient. Just like you know USA, Europe and Japan is having too high gearing, be it private or public, sooner or later they will burst, in a few ways, either stocks will collapse like Japan, or the currency will depreciate drastically against commodities, in short, or property prices collapse, I believe, which ever asset class that is too high in gearing will eventually dropped, Japan properties and stocks is a very good example.

SOS Conquer the Crash

WHAT HAPPENED?

Crude oil set new high
Gold set new high
Silver set new high
Sugar set new high
Cotton set new high
Stock market in DJIA max at 12400 in 2010/11 (will it exceed this high?)
USD dollar set new low
PIMCO sold all its treasuries in late Feb 2011 in one of its funds (at the moment Fed is taking up all the treasuries sold)

MyView

WILL ALL THE ABOVE REVERSE? USD goes up, the rest of the asset class goes down. Well, only time will tell. The usual answer to USD going to the south is the Fed printing lots of money, but Gary Shilling said, the Fed does not print money BUT control the liquidity in the banking system and it is up to the bank to give credit to the end user. Instead of using the liquidity in the Bank to lend to private sector, which already too much debt, the liquidity is use for speculation in other assets such as commodities, emerging markets, crude oil etc.

SOS Malaysia Loan & Property Secrets

Household Debt to Household Income

Malaysia - 140%

USA - 123%

Singapore - 105%

Property Loan to Total Loan

Malaysia 2010 - 36% (about 24% in 2000)

Housing Supply in Klang Valley

(residential units in millions)

2004 - 1.22

2005 - 1.33

2006 - 1.42

2007 - 1.52

2008 - 1.61

2009 - 1.64

2010 - 1.70

Supply of Condo in Kuala Lumpur

2004 - 12,000

2005 - 15,000

2006 - 16,000

2007 - 20,000

2008 - 22,000

2009 - 28,000

2010 - 30,000

2011e - 38,000

2012f - 40,000

2013f - 48,000

MyView

Household debt over household income in Malaysia is kind of high comparatively with USA and Singapore. Property loans have also increase significantly over the past decade.

Bubble in property prices normally is caused or driven by loan. Hence, one has to monitor the increase of properties loans and the prices in properties. Some common indicators are new launches crowd, auction prices and properties groups increase in members as well as the common topic in a kopitiam is about properties, not to mentions banks are giving lots of freebies for property loans.

What the governments fails to provide us is the UNSOLD UNITS, which is another indicators of a bubble as well as numbers of AUCTIONS (since of inability of payments).

If one as the questions, when will the property bubble burst? Well, in China, after government efforts lately, Feb 2011, home prices increase in 68 out of 70 cities. It defies government effort to keep housing affordable. And it is alway most common government only act too late and most of the time behind the curve. Hence, the properties, be it in China, Australia or Canada or even Malaysia, they may burst any time, just awaiting the BLACK SWANS.

SOS Nuclear Radiation Unveiled!

What is radiation?

Radiation is energy given off by matter in the form of rays or high-speed particles. There are many kinds of radiation and not all of them are dangerous.Heat and light are actually types of radiation that humans can see and feel. However, there are other types that we can’t detect. One of these is particle or “nuclear" radiation, which is used in nuclear power plants.

What is ionizing radiation?

Nuclear radiation is a type of ionizing radiation, which is invisible and passes through matter. We use ionizing radiation like x-rays and gamma rays all the time for medical purposes. However, large doses of ionizing radiation passing through living tissue can affect natural biological processes. Exposure to large doses can be harmful to one’s health.The effect of radiation exposure is dependent on three factors:
strength of the radiation
size of the body
length of exposure.

What is a nuclear meltdown?

When a nuclear power plant malfunctions, unchecked nuclear reactions can cause the radioactive material and its container to heat up and melt. The material may escape into the surrounding environment if the containment structure has been damaged.The process is similar to an overheating engine: if its radiator or cooling system malfunctions, a motor will heat up and its parts will bind and eventually fail.The resulting danger from a nuclear meltdown is exposure to the environment of radioactive material, but not a nuclear explosion.

How can someone come into contact with radiation?

Radiation cannot be spread from person to person. Small quantities of radioactive materials occur naturally in the air, drinking water, food and our own bodies.
People also can come into contact with radiation through medical procedures, such as X-rays and some cancer treatments.

SOS What to do now?

Middle East and North Africa - political crisis

Christchurch - earthquake crisis

Queensland - flood crisis

Sandei- earthquake and tsunami crisis & nuclear radiation crisis

Europe - PIIGS debt crisis

UK - Debt Crisis

USA - Financial (Debt and Derivatives) Crisis (banks bankrupted) and states financial debt crisis

China - Inflation crisis

What to do now?

All happens at the same time. How?

MyView

It is quite chaos lately, the number of natural disaster and Man-made disasters. Very uncertain.

Very volatile. What should we do or do not do? Time to put on a thinking cap and common sense.

SOS Tsunami & Earthquake

Earthquake in NZ, China, Japan & Tsunamin in Japan

SOS Prechter's March 2011 Issue reveals....

There's much more in the March Elliott Wave Financial Forecast: (MyView in RED)

Waning momentum in the stock market -- what does it mean for the rally? End of rally
An "incredible statistic" about the market rally's volume relative to price action. End of Rally
Recent reversal patterns: the crucial difference in the NASDAQ's vs. the Dow. End of Rally
If equities "roll to the downside," will Treasury bond yields follow? Bond yields will drop as well
Gold's price channel since the year 2000: what the upper trend line is showing. End of rally
"Doom" surrounding the U.S. dollar, and what similar historical extremes produce. Rebound sharply
An answer to the question, What if everyone is bullish toward crude oil? End of rally for crude oil
Why the silence among inflationists about residential real estate? They use different basket for CPI
How the "clash for cash" extends from the Mideast to Madison, Wisconsin. Social mood?
A commonly-believed myth about the bond market (hint: this "misconception" involves the Fed). The Fed doesn't dictate the rates, it is the market participants, Fed just follow
Recent price patterns in 15 global emerging markets, stacked neatly in two charts -- which send one clear message to U.S. investors. End of Rally for EM?

MyView

If we notice for major stock markets seems to be synchronised. One day up, most major markets are up, when it is down the next day, it moves the same way? Are they having the same FUNDAMENTAL or merely the psychology of the fund managers? Or merely following the LIQUIDITY? Will it be ANOTHER Tsunami like 2007-2009 March? This time round, more will be wipe out.

The BEAR may be back for a VENGENCE!

SOS Jim Rogers says in March 2011

Jim says:

1. Short emerging markets


2. Short Nasdaq


3. Long Commodities


4. Long US Dollar (for short term due to recent panic, a rebound is expected)

MyView

Very good ideas. Try all four at the same time, surely he can't be wrong 4 out of 4, timing wise, but, he is a BILLIONAIRE, so he must have good research. Of course, don't follow blindly, investigate his reasoning, and research on the information.

SOS Stock markets

Marc Faber says (08 March 2011) on CNBC:-

1. Stocks may correct up to 20% or more due to the overbought position (next 3-6 months);


2. Commodities will correct as well, as the stimulus has cause most assets class to inflate

MyView

US stock market has doubled since 2009, i.e. almost in 2 years. A major correction (if any) is long overdue. The stock market is also overbought, another reason for correction. On the same score, mutual fund is almost fully invested, similar prior to the 2008 crash and optimism is at its peak for stocks and commodities. So is US dollar, at its most pesimistic sentiment.

Jim Rogers in his current interview says, US dollar may rebound (next 3mths or a year) in the short and medium term as he explained, when the scale on the other side is overloaded, it will move back the opposite side, to balance off.

If both Marc Faber and Jim Rogers are right, then, a reverse in US dollar will cause the drop in most other assets classes example, stocks and commodities. Of course they are saying US dollar in a long run will become "TOILET PAPERS". In a long run, I believe, everyone dies (physically) and they are correct to say so.

They are not the best in timing the market, but their "view" should be heard, especially Jim Rogers puts his money where his mouth is.

SOS Property BUBBLE

Some of the available measurements, but nothing is absolute:

1. Rental Yield
2. Household income over household debt
3. House price over household income
4. Unsold stocks available over housing supply
5. Low interest for mortgage
6. Easy credit from bankers
7. Increase is too fast in short period
8. Resulted from Carry Trade
9. Most purchase now for own use
   

Some of the countries that the ratio is showing red flags (but not absolute)

1. Australia
2. Hong Kong
3. China
4. Canada
5. Singapore

So, there is not really one measurement, and even it has reach a danger level, it may last a few years. One argument for China property is that the buyer pays 40 to 50% deposit, hence, has very strong holding power and also, so much money not reported being used to purchase properties, so it may last for a long while before the bubble "pop"

MyView

For every argument that a bubble is going to burst there is a counter argument that it will not burst. Besides evaluating the measurements, one of the important indicator is the UNITS UNSOLD trend and UNITS not occupied (which sometime not easy to obtained).

SOS 2011 Financial Tsunami

Financial Tsunami, 2011 or 2012?

Implications - similar to 2008, but double the effects.

If 2008 equivalent to Christchurch 6.3, 2011 will likely be Christchurch 10.0

Why?

Why Not?

Derivatives not unwinded yet, long way to go.

Bad debts, not reflected much in the system, thanks to new FRS.

New norm by Gary Shillings, US growth will be around 2.0% average mainly due to unemployment and 2 million unsold properties.

Gearing by governments, and printing of money.

MyView

Marc Faber think we are in DOOM stage.

SOS Up Down Up

World stock markets is very volatile lately, and funnily seems to be synchronised as well. Hmmm, does that mean DM or EM have the same economic dynamics? Definitely not, the DM interest rate is near zero while EM is far more higher.

Debt level in DM is far more than EM. So, why does the DM or EM markets MOVE in a synchronised way?

Each economy has its own social dynamic and financial dynamics, which has a different factors effecting them. But the synchroncity appears irrational, how do we explain this phenomenom.

MyView

One cannot even predict what another person think, how would one then predict how the crowd thinks?

EM = emerging markets
DM = developed markets