[unable to retrieve full-text content]Cameron staked his political career on campaigning to keep Britain in the European Union against a backdrop of growing euroskepticism within his own Conservative Party. With his wife Samantha at his side, a stoic Cameron said he is not the correct "captain ...
Retail gold buyers take profits in bullion after Brexit price surge
A saleswoman shows a gold earring to customers at a jewellery showroom in Mumbai, July 21, 2015.
Reuters/Shailesh Andrade/Files
LONDON Retail gold investors are booking profit on metal bought to hedge against Thursday's decision by British voters to leave the European Union, while an initial surge in buying slackened off on Monday.
The chief executive of online platform BullionVault said on Monday that while buying had risen sharply in the last session, its users had overall been net sellers since the Brexit vote became apparent on Friday, liquidating a quarter of a tonne of gold.
"Our users bought a lot of gold going into this crisis, and some are selling to bank substantial profits from Friday's shock," Paul Tustain said.
Wolfgang Wrzesniok-Rossbach, chief executive of German bullion dealer Degussa, and Pieter Boumeester of Dutch precious metals vendor Doijer & Kalff, said they had also received several enquiries about selling gold.
In New York, gold dealers reported their busiest day in months, as phones rang off the hook with new orders.
But after a surge in the business on Friday, "over the weekend, and our online shop is open 24/7, we have seen only the usual business," Degussa's Wrzesniok-Rossbach said.
Edward Kay, president of Buyers of New York, said he had received 25 calls during the first few hours of Friday morning as news of Brexit sank in, compared to around 5 to 8 on a normal day.
"We received non-stop phone calls of people trying to sell their gold, their bullion, their jewellery," Kay said. "We had a whole full waiting room of people."
Uncertainty and high prices dampened the initial jump in gold demand from retail investors, who flocked to bullion after the Brexit news unleashed a slide in stocks, sterling and the euro.
UK buyers snapped up bars and coins, while dealers as far afield as the United States, France, Germany and Singapore reported surging demand.
"The first news on Friday led to good demand, but people are giving it a second thought now," Degussa's Wrzesniok-Rossbach said. "People are uncertain whether Brexit will actually take place in the short term... the stock markets have come off, but we're not talking about a meltdown. I think that's why people didn't rush to buy more gold."
WAIT AND SEE
European bank stocks and the pound were set for their biggest two-day slides on record on Monday as Britain's vote shook up global financial markets for a second day.
Nonetheless, Richard Hayes, chief executive of the Perth Mint, said its customers were sticking to "wait and see".
"If the price rise is sustained, then we'll see additional demand come to the market, but what people don't want is to buy at these prices, then a week from now, it's $50 bucks lower," he said.
Singapore-based precious metals retailer Silver Bullion Pte Ltd said its sales of gold and silver normalised over the weekend after surging more than 600 percent in its four-hour peak sales window on Friday.
In India, which vies with China for the title of the world's biggest gold market, high prices on Monday are putting off some potential buyers. Many Asian consumers dislike higher prices because they see gold as a long-term store of wealth, rather than a speculative investment.
Dealers in India were offering a record discount up to $57 an ounce to the global spot benchmark on Monday, against $30 on Thursday. Indian gold prices peaked at 31,925 rupees per 10 grams on Friday, the highest since September 2013.
"Demand is very dull. Consumers think prices will not be sustained at higher levels," Mukesh Kothari, director at bullion dealer RiddiSiddhi Bullions in Mumbai, said. "(Buyers) are postponing purchases."
Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong, agreed that high prices were likely to put off its customers. "Unless it comes below $1,300, we won't see too much demand at this level," he said.
(Reporting by Jan Harvey in London, Gus Trompiz in Paris, Josephine Mason and Luc Cohen in New York, Rajendra Jadhav in Mumbai, Michael Hogan in Frankfurt, Anthony Deutsch in Amsterdam, Melanie Burton in Melbourne and Koustav Samanta in Bengaluru; Editing by Veronica Brown and Ruth Pitchford)
ECB conference kicks off in the shadow of Brexit
The heads of the European Central Bank have come together for a strategy meeting in Sintra, Portugal. There can be no doubt that the gathering will focus on what the ECB can do to cushion the impact of Brexit.The Brexit vote has sent financial markets into a tailspin and investors have been awaiting a response by major central banks.
At its meeting in Sintra, Portugal, which will end on Wednesday, ECB officials have signaled the lender stands ready to support financial stability in the wake of Britain's vote to leave the European Union.
Welcoming arriving participants on Monday night, ECB chief Mario Draghi said the best word to describe his reaction to the British vote was "sadness." He said he was "trying to find the right word to describe our feelings" and referred to "our British friends."
At the same time, Draghi urged conference participants to put the "extraordinary circumstances" of the past week aside and focus on the gathering's academic themes.
Change of plan
The central bank confirmed, though, that a planned and important panel discussion would not take place at all. It was to bring together Draghi, Fed Chair Janet Yellen and Bank of England Governor Mark Carney. However, the latter two are now not attending the meeting at all, following the pro-Brexit vote.
Draghi for his part will now attend a European Council meeting in Brussels on Tuesday and Wednesday, but will have time to deliver a keynote speech in Portugal on Tuesday morning.
The ECB's Sintra conference is the equivalent to the one held annually by the US Federal Reserve in Jackson Hole, Wyoming.
hg/jd (Reuters, dpa)
What Britain's EU split means for you
As many people around the world are trying to wrap their minds around what just happened in Britain, you may also be wondering "What does the Brexit mean for my money?"
If you are worried about your 401(k), take heart. Most experts say you shouldn't rush to sell stocks and some even say it's an opportunity to buy. And, bonus for those looking to borrow: rates may fall.
Yes, things are going to be bumpy, but this is a time to stay calm and carry on.
Stocks and retirement
Investors with heavy investments in the U.K. and Europe may have felt a sting Friday. U.S. stocks fell more than 3 percent but some European indexes fell over 12 percent.
Market experts say the initial market reaction was largely emotional. But they noted Britain's separation from the EU could take several years to play out and urged investors not to sell out of fear. And some said investors may even want to take advantage of the dip to buy.
"For the typical U.S. investor this is not really going to change anything," said Jurrien Timmer, director of global macro for Fidelity Investments. "It's not going to affect the U.S. economy, it's not going to tip us into recession."
Expecting the worst, Robien Christie of Fort Worth, Texas, checked his 401(k) Friday morning for the first time in months.
"I was actually surprised," the 25-year-old said. "I thought it would be bad but it's still positive for the year."
He won't be touching his 401(k), but may put money into the British pound and into buying some stock in British companies as potential long-term investments.
Others, meanwhile, said they weren't ready to face the impact.
"I just don't want to know right now," said Leah Jones of Chicago.
The 39-year-old remembers sitting at her desk checking her retirement account when market crashed in 2008. She didn't want to relive that but plans to face it soon: She will call her financial adviser next week for some advice.
Understandably, it was a day for worry for many.
The VIX, known as the fear index, jumped from 17 to 25 Friday. That is far below the high of 80 it reached in October 2008 in the weeks that followed the collapse of Lehman Brothers.
"I think that things will work out over the long term. This isn't done in the short term ... the disappointment will roil the markets for a while," said John Manley, chief equity strategist at Wells Fargo Funds.
Whether it's the downturn in the stock market or the increase in global uncertainty, these events are a reminder of the need for a thoughtful financial plan, said Mark Hamrick, senior economic analyst for Bankrate.com. That means setting aside adequate savings and having a diversified portfolio.
If you don't have a financial adviser, look for information on the right investment choices for you with your retirement plan company.
"You need to have a plan that makes sense for you and you need to stick to that plan and that includes not freaking out when something like this happens," Timmer said.
Interest rates
The Federal Reserve has been slow to raise interest rates due to concerns over global economic instability, and the U.K. vote makes it even less likely the Fed will act soon.
That's bad news for savers but great news for borrowers, particularly those looking to get a new mortgage or refinance.
Anxious investors seeking the relative safety of U.S. bonds sent prices for the 10-year Treasury note sharply higher. In turn, that pulled the yield on the notes lower Friday. Because long-term mortgage rates tend to track the yield on notes, mortgage rates may fall further.
"Mortgage rates are tumbling now and they're approaching record-low levels," said Greg McBride, chief financial analyst at Bankrate.com. "If you're a borrower, don't wait to lock your rate as this opportunity may not last long."
The average 30-year fixed-rate mortgage edged up this week to 3.56 percent from a 52-week low of 3.54 percent last week. How far rates drop and how long they stay there depends on the extent to which investors remain jittery.
"If markets bounce back next week, mortgage rates will too," McBride said. "But if the sell-off continues, mortgage rates will continue to fall."
The prospect of a drop in mortgage rates has some homebuyers shifting gears.
Zack Moore of Beaumont, California, says that, before Friday, he was ready to get prequalified on a home loan right away. But now he's going to hold off so he can make sure to lock in a lower rate.
"If I see them drop at all, I may strike, I may try to wait a little while," said Moore, 41.
The Brexit could also indirectly benefit other borrowers if the Fed holds off on raising the central bank's key benchmark interest rate. When that rate goes up, it can raise short-term borrowing costs for banks, and that can ultimately lead to higher rates on things such as credit cards, home equity loans and credit lines.
European stocks crash after UK vote to leave EU
Spot gold plumbed a two-week low of $1,260.36 an ounce and was last down 0.4 per cent at $1,261.24.
Gold fell as the latest ebb in risk aversion dented investor demand for safe-haven assets.
"All eyes are on that vote", said Ian Lyngen, a senior government bond strategist at CRT Capital in Stamford, Connecticut. Fed primary Yellen stated on Tuesday the central bank's capability to raise rate of interest this year might hinge on a rebound in employing that would encourage policymakers the United States economy isn't really failing.
"Evaluating from her comments, a rate hike in July is totally off the table".
Financial markets have been wracked for months by worries about what a potential Brexit would mean for Europe's stability, but the latest opinion polls showing the "Remain" camp holding a small lead have provided some comfort.
In the equity markets, London's FTSE was up 0.6 percent and neck and neck with German's DAX at the top of the European leader board, both of which helped push MSCI's 46-country All World index higher. Bookmakers have been predicting a much lower chance of a "Leave" vote since the murder of pro-Europe UK lawmaker Jo Cox last week.
Brent crude oil fell back below $50 a barrel, which it past on Monday for the first time in a week in a rally driven by polls that appeared to show the "Leave" campaigns momentum weakening. It last traded at $49.97.
The so-called "Brexit" risk - or Britain exiting the 28-nation European Union - is still hanging over global financial markets ahead of Thursday's closely watched referendum.
"I think we'll hop from poll to poll... and you'd have thought that there will be another couple of wobbles before we're done", said Societe Generale macro strategist Kit Juckes.
The pound was up 0.6 per cent at $US1.4802 on Thursday after touching $US1.4847, its highest since the beginning of the year.
The Japanese currency, which is often sought by investors in times of market uncertainty, also fell 0.8 percent to 104.72 per dollar.
Yields on low risk US Treasury yields fell slightly.
Government bonds held firm with 10-year Japanese bonds yielding 0.13 percent while the spread between 10- and two-year debt also held steady at 95 basis points.
Greek bonds got only a modest lift after the European Central Bank said on Thursday it would accept them as loan collateral again but would only "examine" adding them to its 1.7 trillion- euro asset-buying programme.
A trader works on the floor of the New York Stock Exchange.
Major currency volatility rose the most on record as the U.K. Brexit vote roiled markets Friday, sending the pound to the lowest in more than three decades and spurring the yen to gains between 3 percent to 12 percent against its 31 biggest counterparts.
POLITICAL REFLECTION IN FINAL 2007: Wesia CLASS AND KSATRIA
POLITICAL REFLECTION IN FINAL 2007:
Wesia CLASS AND KSATRIA
People ask, why no sane person is taken word for the name of this site? The answer was brief.
A sane and alert is the objective. He only saw the reality. When she poured her observations, herbs and hue given to his thinking adjusted to reality itself, so there is no conflict. Information such as fiction can be like Superman or physics book. Superman is a fictional story easy to read, but just to be read, not to be analyzed and matched with reality. People never do a reality check on Superman's ability to fly. What underlies the ability to fly Superman, Archimedes force (buoyancy force) or force such as aircraft propulsion? If the Archimedes force that makes Superman float / fly, then Superman should be light weight once and density smaller than the density of air. The next question will appear when viewed in action Superman lifting a bus, a plane: whether the average specific gravity of iron (bus or plane) plus Superman lighter than air? Suppose Superman uses propulsion system to fly, where is a propeller or jet system it?Eating for energy what he fly?
Indeed, the story of Superman is a fictional story. What I want to stress is that this fictional story to collide with the natural sciences that has always been the rationale sane person in the review of the information. The underlying conclusion sane person on the basis of facts and reality and not on the basis of passion, emotion and spirit ism espoused. This article will present a topic with the aim of re-sharpening our objectivity as rational.
The caste system is a classification society based profession. Brahmins are educated class (= the learned scholars) and religious scholar. Wesia is the working class. The Knights are a class of bureaucrats and politicians. And Shudra is wasted class. For the class of Brahmins and Wesia, roles and their contribution to the prosperity clear. But for the warrior class, politician, I never understood what their contribution to the prosperity of society. Have you ever asked what work the kings and nobility in relation to public welfare. For example, as in the legend of Ramayana or Mahabharata, or in the history of the Malay sultans in Sumatra, or Gajah Mada, Hayam Wuruk, Ken Arok. What their work truly productive and provide benefits to prosperity?
Human culture is formed and engineered in part by what is called history. Speaking about the issue of people who are meritorious, useful to mankind, many can not mention it. For example, when you are driving a car on smooth paved roads, and compare it with soil or rocky roads or cement roads, do not you think Who have you ever come across the asphalt and began to use it to the highway?
If we relax at home, on days of heavy rain, stormy, have you thought who invented cement, building materials that are familiar to you and are very useful to make a home, a steadfast from rain and sun, take refuge at night from thieves and looters. How many things that make our lives easier made of cement than houses; bridges, power poles, roads, embankments breakwater, demaga ship. Much more. Strange, is not that the inventor of the cement does anyone know?
If you are told to say who the first president of the United States, or Indonesia's first president, or prime minister of Canada first, then easily you mention the name of G. Washington, Sukarno and McDonald. Strange is not it? Services what they are doing in regard to the comfort of your life. Take just Kemal Attartuk, or Mahatma Gandhi? What their services to you and humanity so that their name is in the history books and to learn and make you memorized? Compare with the inventor of asphalt, cement, light or penicillin (antibiotic).
So you're not curious I will call the name of the inventor of the asphalt. Asphalt in English calledtarmac, stands tar McAdam. John McAdam, a Scot, was the pioneer for the use of asphalt / bitumen for road kostruksi far sebelun 1900. For cement, this stuff has been around since ancient Roman times, and is not known who the inventor. Moderate to penicillin, although originally discovered as an antibiotic by French medical student Ernest Duchesne, in 1896, but recognized inventor is Alexander Fleming in 1928.
How could the people who actually provide the convenience in our lives such as John McAdam, Alexander Fleming, Ernest Duchesne, Carnot, not widely known, was Washington, Gandi and Sukarno, very well known?
The world was created by politicians. Politicians or in the language of caste is nothing but the warrior class is a class of parasitic unproductive. Raja, a member of parliament and the knights - the political elite - in earlier times, no more than a handyman palak, approximately the same as in recent times. If you follow the river Rhine or Rijn, many castles along the river, on the hill.Also if you are driving in England and Scotland, found many castles, knights of old settlement on the hill, looking to trade lane road in the valley of the hill. See how many kingdoms along trade lines the Strait of Malacca, as the sultanate of Kedah, Perak, Selangor, Negri Sembilan, Malacca, Johor, Riau, Deli, Langkat, Samudra Pasai, Sriwijaya (Malacca Strait is the trade route from China to India and Arabia by sea ). Perpetrators of these former empires like the timer / artisan palak who became ruler along the city bus service, or pack unwilling to bend in the road.When merchants passed, then the tax collector will meluruk to ask for tax. (Is this the origin of import duties and taxes through? I do not know)
If we read the story of Ramayana, Mahabharata - both tell the life of the warrior class - did not appear at all the stories of how the knights, the political elite, prosperity of the people. There is only uses resources to their interests - the political elite - his own, the war, the struggle for wealth and power. Similarly, if we read the biography of Sukarno, difficult to find where the activities which make the people prosperous. Then ...., how they are actually not very useful it can be admired and flattered beyond the borders of their services?
History, control of the writing that is the answer. The parasite (I am a bit exaggerating) called politicians, the elite, to justify their existence should create an image that they are important.They made a hero of his circle and mengagung-agungkannya. Everything was done through history and is taught in schools, or if in earlier times, made his legend and spoken continuously, hereditary. This is the word of Joseph Goebbels, propaganda minister of Nazi Germany. He honestly admit:
"If you tell a lie big enough and keep repeating it, people will Eventually come to believe it.The lie can be maintained only for such time as the State can shield the people from the political, economic and / or military consequences of the lie. It Tus Becomes vitally important for the State to use all of its powers to repress dissents, for the truth is the mortal enemy of the lie, and Tus by extension, the truth is the greatest enemy of the State. "
In essence, that lie anything that sounded continuously, then people will believe. History recounted the romance and grandeur of the agents of history. Is that a robber / thief like Ken Arok, or cold-blooded killer like Gajah Mada (Remember the massacre in Bubat), by history as a hero. Romanticism, provide make-up shades of color and spice in the form of the grandeur and majesty of the actors to make the reader forget the essence of the history of moral values.Morally depraved could be covered by meke-up and condiments romance. Measures Ken Arok kill stumps Ametung regent, his adoptive father and marry his widow Ken Dedes then replace regents, not a moral action. Gajah Mada action or kill the entire family bride of the king, nor immoral actions. And yet, both are perceived as heroes. History also remove the black mark of a person. You never hear the Sukarno regime imprisons group Koes Brothers singer because she did not like the songs are mellow.
In history, is there told about the inventor of cement, asphalt, cotton, nylon or a car? There was only a story about the president, ministers, generals, and the like. And they were all superb. I will provide detailed examples, namely Abraham Lincoln, one of the Amerikan president praised and remembered as a great president of the US if not the largest. Thus disanjungnya until the building as one that can not be separated from the image of the USA. This building - Abraham Lincoln Memorial - built to his memory. As if people have forgotten or do not know that the misery of the most severe in the history experienced by the American people is because of decisions made and Abraham Lincoln. The civil war between North and South, and Confederationist decided Federationist Abe Lincoln is the greatest misery in the history of the USA. Began in 1861 and ended in 1865, and only four years cost the lives of 620,000 or 2% of the population died in vain. If today's standards, 2% of the US population is 6 million. Imagine how many.
A sane and alert is the objective. He only saw the reality. When she poured her observations, herbs and hue given to his thinking adjusted to reality itself, so there is no conflict. Information such as fiction can be like Superman or physics book. Superman is a fictional story easy to read, but just to be read, not to be analyzed and matched with reality. People never do a reality check on Superman's ability to fly. What underlies the ability to fly Superman, Archimedes force (buoyancy force) or force such as aircraft propulsion? If the Archimedes force that makes Superman float / fly, then Superman should be light weight once and density smaller than the density of air. The next question will appear when viewed in action Superman lifting a bus, a plane: whether the average specific gravity of iron (bus or plane) plus Superman lighter than air? Suppose Superman uses propulsion system to fly, where is a propeller or jet system it?Eating for energy what he fly?
Indeed, the story of Superman is a fictional story. What I want to stress is that this fictional story to collide with the natural sciences that has always been the rationale sane person in the review of the information. The underlying conclusion sane person on the basis of facts and reality and not on the basis of passion, emotion and spirit ism espoused. This article will present a topic with the aim of re-sharpening our objectivity as rational.
The caste system is a classification society based profession. Brahmins are educated class (= the learned scholars) and religious scholar. Wesia is the working class. The Knights are a class of bureaucrats and politicians. And Shudra is wasted class. For the class of Brahmins and Wesia, roles and their contribution to the prosperity clear. But for the warrior class, politician, I never understood what their contribution to the prosperity of society. Have you ever asked what work the kings and nobility in relation to public welfare. For example, as in the legend of Ramayana or Mahabharata, or in the history of the Malay sultans in Sumatra, or Gajah Mada, Hayam Wuruk, Ken Arok. What their work truly productive and provide benefits to prosperity?
Human culture is formed and engineered in part by what is called history. Speaking about the issue of people who are meritorious, useful to mankind, many can not mention it. For example, when you are driving a car on smooth paved roads, and compare it with soil or rocky roads or cement roads, do not you think Who have you ever come across the asphalt and began to use it to the highway?
If we relax at home, on days of heavy rain, stormy, have you thought who invented cement, building materials that are familiar to you and are very useful to make a home, a steadfast from rain and sun, take refuge at night from thieves and looters. How many things that make our lives easier made of cement than houses; bridges, power poles, roads, embankments breakwater, demaga ship. Much more. Strange, is not that the inventor of the cement does anyone know?
If you are told to say who the first president of the United States, or Indonesia's first president, or prime minister of Canada first, then easily you mention the name of G. Washington, Sukarno and McDonald. Strange is not it? Services what they are doing in regard to the comfort of your life. Take just Kemal Attartuk, or Mahatma Gandhi? What their services to you and humanity so that their name is in the history books and to learn and make you memorized? Compare with the inventor of asphalt, cement, light or penicillin (antibiotic).
So you're not curious I will call the name of the inventor of the asphalt. Asphalt in English calledtarmac, stands tar McAdam. John McAdam, a Scot, was the pioneer for the use of asphalt / bitumen for road kostruksi far sebelun 1900. For cement, this stuff has been around since ancient Roman times, and is not known who the inventor. Moderate to penicillin, although originally discovered as an antibiotic by French medical student Ernest Duchesne, in 1896, but recognized inventor is Alexander Fleming in 1928.
How could the people who actually provide the convenience in our lives such as John McAdam, Alexander Fleming, Ernest Duchesne, Carnot, not widely known, was Washington, Gandi and Sukarno, very well known?
The world was created by politicians. Politicians or in the language of caste is nothing but the warrior class is a class of parasitic unproductive. Raja, a member of parliament and the knights - the political elite - in earlier times, no more than a handyman palak, approximately the same as in recent times. If you follow the river Rhine or Rijn, many castles along the river, on the hill.Also if you are driving in England and Scotland, found many castles, knights of old settlement on the hill, looking to trade lane road in the valley of the hill. See how many kingdoms along trade lines the Strait of Malacca, as the sultanate of Kedah, Perak, Selangor, Negri Sembilan, Malacca, Johor, Riau, Deli, Langkat, Samudra Pasai, Sriwijaya (Malacca Strait is the trade route from China to India and Arabia by sea ). Perpetrators of these former empires like the timer / artisan palak who became ruler along the city bus service, or pack unwilling to bend in the road.When merchants passed, then the tax collector will meluruk to ask for tax. (Is this the origin of import duties and taxes through? I do not know)
If we read the story of Ramayana, Mahabharata - both tell the life of the warrior class - did not appear at all the stories of how the knights, the political elite, prosperity of the people. There is only uses resources to their interests - the political elite - his own, the war, the struggle for wealth and power. Similarly, if we read the biography of Sukarno, difficult to find where the activities which make the people prosperous. Then ...., how they are actually not very useful it can be admired and flattered beyond the borders of their services?
History, control of the writing that is the answer. The parasite (I am a bit exaggerating) called politicians, the elite, to justify their existence should create an image that they are important.They made a hero of his circle and mengagung-agungkannya. Everything was done through history and is taught in schools, or if in earlier times, made his legend and spoken continuously, hereditary. This is the word of Joseph Goebbels, propaganda minister of Nazi Germany. He honestly admit:
"If you tell a lie big enough and keep repeating it, people will Eventually come to believe it.The lie can be maintained only for such time as the State can shield the people from the political, economic and / or military consequences of the lie. It Tus Becomes vitally important for the State to use all of its powers to repress dissents, for the truth is the mortal enemy of the lie, and Tus by extension, the truth is the greatest enemy of the State. "
In essence, that lie anything that sounded continuously, then people will believe. History recounted the romance and grandeur of the agents of history. Is that a robber / thief like Ken Arok, or cold-blooded killer like Gajah Mada (Remember the massacre in Bubat), by history as a hero. Romanticism, provide make-up shades of color and spice in the form of the grandeur and majesty of the actors to make the reader forget the essence of the history of moral values.Morally depraved could be covered by meke-up and condiments romance. Measures Ken Arok kill stumps Ametung regent, his adoptive father and marry his widow Ken Dedes then replace regents, not a moral action. Gajah Mada action or kill the entire family bride of the king, nor immoral actions. And yet, both are perceived as heroes. History also remove the black mark of a person. You never hear the Sukarno regime imprisons group Koes Brothers singer because she did not like the songs are mellow.
In history, is there told about the inventor of cement, asphalt, cotton, nylon or a car? There was only a story about the president, ministers, generals, and the like. And they were all superb. I will provide detailed examples, namely Abraham Lincoln, one of the Amerikan president praised and remembered as a great president of the US if not the largest. Thus disanjungnya until the building as one that can not be separated from the image of the USA. This building - Abraham Lincoln Memorial - built to his memory. As if people have forgotten or do not know that the misery of the most severe in the history experienced by the American people is because of decisions made and Abraham Lincoln. The civil war between North and South, and Confederationist decided Federationist Abe Lincoln is the greatest misery in the history of the USA. Began in 1861 and ended in 1865, and only four years cost the lives of 620,000 or 2% of the population died in vain. If today's standards, 2% of the US population is 6 million. Imagine how many.
Heroes or silly?
Misery not only for the soul in vain, but also economic. Party Federation (it was Abraham Lincoln), ran out of money. There is no money to conduct economic activity. However, the army must be paid. The new 1-year battle has been confusion Federal Government find the funds for this war. In 1862 the US government enacted into law that gives the right for the government to print the national currency. Act the right to print money without backing up anything this is the first in the history of the USA. Then dicetaklah monies green. Money-money is not the same as the dollar now, because at that time only one side with pictures. Greenback called because only one side of the display (and the green color). That is the origin of the word Greenback.
The control over the right to print money without the support of tangible assets such as gold or silver this causes a lot of cynicism from many walks of life. I found a cartoon on this subject (see figure below).
Costs incurred by the government of the Federation reached $ 15 billion of money that time. If diekivalenkan with the present is $ 600 billion. If you like the current US population, 301 million, then everyone just assume $ 2000 per head. But at that time the US population of only 31.4 million, so that everyone should bear the brunt of the Federation of $ 20,000 per head.Unfortunately, not only the Federation of the cost, but also enemies, namely the Confederate side. Say the same magnitude. So in the civil war - US Civil War, an estimated people living must bear the burden of the $ 40,000. That's a lot!
People may argue that the US civil war is glorious, the abolition of slavery. Sane people say sacrifice in vain. At the time of slavery are everywhere. In South America, Spanish in Latin America also had the negro slaves. In Asia and Africa are still valid slavery. In areas of the world in general other than the US, slavery disappeared without a drop of blood out into battle, without fighting anything. Abraham Lincoln could do abolition of slavery without war, without sacrificing the 2% of its occupation and without burdening $ 40,000 (the equivalent of money in 2007) inhabitants. It is only government spending and does not include homes possessions, infra-structure and fields were destroyed. May be greater than government spending.
It would be futile. Sacrifice in vain for that stupid decision. But he, Abraham Lincoln, highly revered thanks to a promotion, herbs and image created by the political elite. That's history.
The formation of the image that politicians are the important thing is very universal, except perhaps in Islamic culture are popular only four caliphs and Salahuddin al-Ayubi (next time we will discuss how the governor of North Africa era of Umar bin Khattab, namely Amr bin Ash actually reduce entry tax from 72 million dinars per year in the reign of Byzantine be only 12 million dinars, but the increased prosperity). Not only the US, in Indonesia was always glorify the history kstaria. "Do not forget history" said Sukarno, although Ken Arok are thieves / robbers were promoted to the king. We'll see how this nation boasts a heroic war of liberation and full of romance. For those who do not feel the misery of war, it seems as if the war was beautiful, heroic and full of romance. But, I bet if you were on the battlefield and shot in the leg.Not dead and not alive, surrounded by the enemy ......., maybe you peed his pants because of fear or better suicide to relieve stress. My grandmother who had to evacuate when the war of independence, and to find the house broken, gold embedded (buried) in the floor of lost, damaged fields, still entranced by the image created by politicians. I might still sane and not immune to stun it. If you think, what's the point of war? Suriname nonetheless be independent without a war. Also Malaysia, Singapore ..... and a series again. Stupid war that needs to be sacrifice in vain. Do not ask it to politicians, they will deny it. But one thing, the fact that Malaysia, Brunei, Singapore or Suriname's independence without a single drop of blood hero, is undeniable. Does a hero who died at the time of independence it was useless in the sense of inevitable? You do not need to answer it, just ponder. But I remind you, the influence of history on your mindset is strong enough.
It should be recognized that not all citizens knights in history or legend portrayed as a hero.Heroes always need enemies - the bad guy. Hitler, Mussolini entered in the same group with Ravana or Kauravas, the bad guy. Hitler and Mussolini probably no worse than Abraham Lincoln. Only, the chroniclers are not in favor of Hitler and Mussolini because they are the part of the losing and has no control over the writing of history.
In Indonesia at this time, there was a phenomenon that people are vying to become an active warrior class. Does it participate in political parties, including regional organizations. When the Suharto era, mostly so passive knight. At that time, the Suharto regime, recruited many civil servants to be members KORPRI, which supports the ruling party. If only 90% of civil servants dismissed, the circumstances may be the same, no effect on the course of the wheels of government, perhaps even better, because not a lot of distraction to the matter of licensing.The situation today is more severe. Since the position of the knight is lucrative Wesia class, the warrior class does not require skill. Anyway class hero / warrior fact controlled, adjusting the, oppressive and can play tricks Wesia class. But do not forget that the public support is Wesia class.
The move from class to class Wesia productive knight parasite is a process of impoverishment of society. If this phenomenon continues, do not be envious if Malaysia would be much more prosperous than in Indonesia in the future, although in terms of its natural resources Indonesia more. Prosperity does not need a class politician / warrior.
In closing, there are two points that stupid that could be contemplated. The first point is: For what the position of vice president? In the science of organizational management, the position of one-to-one is redundant. The position of supervisor (boss) in charge of one (1) subordinate is redundant. Supposedly, a boss (if possible) have a minimum of 6 subordinate. Therefore, without a vice president, the cabinet still works. The idea mendudukan vice president is a stupid idea and waste.
Points to two. Some time ago, there was a survey conducted by tranparancy International Indonesia (TII) on the corruption perception index in Indonesia was announced (see websitehttp://www.hukumonline.com/detail.asp?id=18140&cl=Berita ). The result says that the police, political parties, parliament (DPR) and the judiciary is the most corrupt institution in Indonesia (See the table below for the data from 2004 to 2007). Champion position always passed from year to year and finalists from year to year remains the same, namely the police, parliament, judiciary and political parties.
The big four versions of the most corrupt institution GCB
Source: TI Indonesia (click to enlarge)
If seen, all of it is from the warrior class -birokrat and apparatus; not Wesia or Shudra class (caste humiliation). In history or political science and the science of statecraft, you've never heard of that parliament, the police, political parties and the judiciary was corrupt.Surprisingly, instead of running the country, heralded, said the most good is the system trias politica, executive, parliament and judiciary. Obviously triad politics is a principle that advocates a corrupt system.
Two years from now, in 2009, we will choose the knights to be placed as enforcers and as a regulator. From year to year we have done. Is our life more prosperous? Do you feel manfat their existence? Is the money they Tariki (taxes) and we pay comparable to what they provide?Mathematically, it is better they do not exist. You are hiring security guards instead of police to maintain security. You go to arbitration if any civil dispute and not to the courts. The law also overlapped. So why should they?
Said people from politics: "Power tends to corrupt."
The logical consequence: "More people with power leads to more corruption."
The Wesia ...., arise. ...... Do not want to say, to them. Select the empty seats. Realize with making your sound card is not valid.
Jakarta end of December 2007
Had the above article inspires you, why not introduce this site to your colleagues so that they also stimulated intellectually.
MONITORING ECONOMIC CRISIS - XVI
MONITORING ECONOMIC CRISIS - XVI
(Week III in December 2007)
TRADING ALERT & REVIEW: SHARES OF GOLD
TRADING ALERT & REVIEW: SHARES OF GOLD
FUNDAMENTAL ANALYSIS MECHANISMS OF SHORT-TERM
Bank of England (BOE) and European Central Bank (ECB) jointly disburse grants / loans liquditas $ 540 billion. That money is very large. And will impact inflation. It could either be temporary and permanent. Banks and private investment institutions affected by the subprime credit for a while (at least 3 months) does not need to rush to liquefy their investments (stocks, gold, commodities) into funds to meet its obligations. Another impact of commercial lending rate LIBOR (London Interbank Offered Rate), also fell. I will not discuss this liquidity flushing effect on the economy. Because the answer is, they can not sidestep a recession. The recession has something to do with consumption (in the US) and now people are in contact with the bag deflated. Banks are also unwilling to extend credit that is geared to consumption (Problem current liquidity crisis for lending recklessly. So do not expect commercial banks dare to give credit easily again).
The temporary nature of liquidity, according to the nature of this pengglontoran namely 3-month loan with a guarantee of anything, including letters of subprime CDO. For melanggengkannya, it must provide a roll-over of loans is continuous liquidity to become permanent relief. As BLBI ..., so. In short, the time for 3 months, tekananan sell because of liquidity could be reduced. Stayed tekannan sales because of the recession (so not all of the factors of selling pressure in the stock market soon, do not rejoice just yet). This flushing also inflationary nature. So it's not unlikely to trigger a resumption of the rally in the gold sector. It wants to be emphasized in this review.
FUNDAMENTAL ANALYSIS OF LONG TERM
Back bad news hit the stock market, Yesterday evening of December 19, 2007, (http://www.iht.com/articles/2007/12/19/business/morgan.php ) Morgan Stanley first in history to record a loss for the quarter whitening $ 5.7 billion in subprime debt. We will be treated to this kind of news throughout the year 2008. The Fed and other central banks are assumed to provide liquidity assistance continues to make efforts alias reflasi. That is inflation.And when the gold price inflation (nominal) will rise. Gold is a fortress of protection of investment in the economy when inflation pressures.
The combination of recession and inflation will benefit gold stocks. At times of crisis gold and silver stocks will triumph than gold and silver sendriri. (Note inflation here is not the same as the government's version of inflation. Inflation version sane person is the increase of money in circulation). Monetary inflation in a period of recession can be subtle, because the numbers that governments are price inflation index. And during a recession prices of goods tend to fall, not least of commodity materials. So the government-approved inflation, CPI (consumer price index), tend to be confined. While monetary inflation rises.
The fall in prices of commodities, capital goods and finished goods would be good for stocks of gold and silver. The production cost of gold mines and silver will go down as oil prices, base metals and equipment down. Therefore, companies, gold and silver is still not make a profit, will be posted gains. Again had at this time a lot of stocks of gold and silver were evaluated assuming a gold price of $ 650 / oz. Though the price of gold is now at $ 800 / oz.
STRONG SUPPORT
The rally in the gold sector of the level of gold price of $ 650 / oz to $ 850 / oz could continue after stalled by a wave of subprime II case. Gold turned out to be sympathetic to the stock market. Even gold stocks slumped more severe than gold and the Dow Industrial.Circumstances seem to be reversed. Gold stock sector is likely to outperform both gold and the Dow Industrial index.
Technically gold since November 2007 and formed a triangle consolidation pattern trading bullish wedge. See Chart-1.
Chart 1 (click to enlarge)
Bollinger bands began to narrow showed that impulsive breakup will occur. The support is in the form of lower Bollinger line, MACD 50D, in addition to support wedgenya own making support for consolidation is strong enough. Gold rally could begin in the period from Santa Clause rally that chances are small and the January effect is great chances. And could continue until March 2008. Opportunities January effect in my estimation is 90%, which means "within the limits of human prediction inevitable".
Index of gold stocks, Gold Bugs - HUI technically have hit the support, 50% Fibonacci retracement level 374. Support is resistance during the 1.5 years of the consolidation period (2006-2007) and turned into support when the index can break this level. So this support is very strong.
GOLD RALLY CONTINUE BACK SOON
There are signs that the rally in the gold sector stocks which had been halted for rest and breath will be resumed. Indeed, the MACD indicator is still not indicate a continuation rally (Chart 2), but other indicators indicators already point in that direction.
Chart 2 (click to enlarge)
Chart-3 is the ratio HUI / Gold. This ratio has hit the lower limit of the trading corridor is established for more than two years. When the ratio HUI: Gold hit this level, then the chances are 95% HUI will out-perform gold. So if gold will rally (conclusion of Chart-1), then the HUI will rally faster again.
Chart-3 (click to enlarge)
The same thing applies to other gold shares, such as the XAU index - Philadelphia Gold Index (Chart 4).
Chart 4 (click to enlarge)
IS THERE CORRECTION sympathetic?
Until now, we still assume that the additional liquidity will make the stock market reduced selling pressure and habits of the end and the beginning of the year can be expected. Suppose there is Santa Clause rally (rally end of the year) and the January effect rally in all sectors of the stock, then gold stocks will rally was sorry, and can be faster than the Dow or S & P. But if there is no end rally and the beginning of the year, how? So there is still one question that still interfere, namely: "If the stock market slumped, whether gold stocks will also experience a correction of sympathy?" This question is disturbing because, not all factors suppressing the stock price can be eliminated by the disbursement of liquidity by the ECB. Therefore, there should be a correlation between the HUI and the Dow Industrial (INDU, DJIA).
Chart-5 shows the ratio HUI / INDU. Relative Strength Indicator, RSI shows in a very low position, level 30. Thus the opportunity to turn around very large. That is, if the change HUI tend to be larger than INDU. In other words, if the Dow corrected, do not make too HUI slumped. Possible gold sector will loose relationship with the Dow and S & P.
Chart 5 (click to enlarge)
GOLD STOCK REVIEW
Gammon Lake Resources (GRS)
I'm a bottom feeder, meaning that like collecting stock that has been battered because they experienced selling pressure because of misperceptions. Of course pretty good fundamental.One stock I anticipated there misperception is Gammon Resources (GRS). GRS experienced strong selling pressure due to misperceptions. Last year EPS (earnings per sharenya) $ -0.76 as quoted in the Yahoo ( http://finance.yahoo.com/q?s=grs ). It is not good. But, whoa. EPS is calculated with the assumption gold price of $ 650 / oz. Nowadays we know that the price of gold is $ 800 / oz. The second, there is bad news, that the GRS financial performance does not meet expectations. Ocampo gold fields newly cleared was the start-up is not as smooth as people think. For ordinary people in mining operations, start-up always is never smooth.Expected second quarter 2007 production of 100,000 oz was only 58,000 oz alone. The surgery is only 58% of the installed capacity. Usually need 2-4 quarters to earn the smooth operation and maximum use of capacity. Thus, a reasonable financial performance GRS recently appeared in I-II quarter of 2008.
Usually the operating costs at the beginning of production is relatively high because of the business units in the still early stages of learning and also still a lot of costs incurred for process modifications and minor changes in the production of devices. So it is natural to assume that in the coming months operating costs will go down.
The lower cost of this operation not only for efficiency and reduced capital spending, but also the expected prices of intermediate goods production (spare parts, fuel, etc.) down. Chart 6 shows the sensitivity of the valuation of the GRS to the level of production, the price of gold and operating costs. Blue curve shows the sensitivity of the valuation of GRS on the condition of the second quarter. Chart red and magenta indicates if the operation is normal Ocampo and production costs can already dieffsisienkan. In summary it can be said that the PER GRS during normal operation is 7 or better.
Chart 6 (click to enlarge)
It seems that GRS has undergone a correction from $ 19 to $ 7.30, more than 60% and hit a strong support. At the level of $ 7 - $ 8, there are investors who collect diligent. The volume of trading was pretty good when share prices rise and the lowest trading volume when share prices fall. (Chart 7). I think downsidenya was not much left.
At the current fair value of gold is $ 2000- $ 2500 per oz. Therefore, GRS can be collected and then stored for 1-5 years until the value of gold reached a fair level.
At the current fair value of gold is $ 2000- $ 2500 per oz. Therefore, GRS can be collected and then stored for 1-5 years until the value of gold reached a fair level.
Chart 7 (click to enlarge)
Gold Fields (GFI)
GFI is a fairly old gold producer based in South Africa. Many fields in South Africa. Many mines are old mines and reserves nearly exhausted. Therefore GFI perform such divestments and trying to find new places such as Ghana, Australia, China, Peru and others.
Gold Fields (GFI) a few months under selling pressure due to falling revenue nearly 31% live.This GFI sell some mines that are not in accordance with its portfolio and also invest for some projeknya. So it was not because its performance is deteriorating. In this case GFI obtaining cash to be invested or used for operations.
GFI include gold producer with low cost, only $ 140 / oz. P2 reserves (proven + probable) reaches 75-100 million oz. With the amount of such reserves and current production costs interinsic value of GFI shares is approximately $ 50 (assuming the price of gold = $ 800 / oz).
I see that the operating margin and profit margin reported in Yahoo (http://finance.yahoo.com/q/ks?s=GFI ), not too good. Only 10% only. 2007 indeed GFI cash flow performance is not too good for a lot of investment. Dlam balance sheet financial report (Table-1) there is an increase of 80% equitynya and from investment in equipment and plant.
Table 1 (click to enlarge)
Cash-flow from operation activities was down (Table 2). Targeted in 2008 some project-projeknya already bearing fruit. Target production is 4:25 million oz. Gold. Cerro Corona mine will produce at 3Q08 and Choco 10 to reopen.
Table-2 (click to enlarge)
GFI in recent months experienced a correction of $ 27 to $ 13 level. Fair value GFI assuming $ 800 / oz of gold is around $ 50. Next year and 2009 expected cash flow back in reasonable due to reduced investment and production rises. Technically, the share price of GFI can play in the $ 9.5 and $ 11.5 (see Chart 8) if the year-end rally and the early years could not break the resistance and exit trading range of $ 9.5 - $ 11.5 this. But if you can get out, then the $ 27 level will try to penetrate. GFI can be seen as an alternative to physical gold investment. 2 -3 times the value of physical gold, which means that GFI shares will rise along with rising gold prices with the strengthening of 2-3 fold.
Chart 8 (click to enlarge)
Up here first, keep your investments and savings, as well as your health. Happy face in 2008 is more challenging. ,If you think that the contents of this blog can stimulate your thinking, why do not you tell colleagues, wife, girlfriend, law / prospective in-laws so that they are also stimulated and protected from Alzheimer's disease. What else next two articles devoted to the layman. Do not forget membari know them. The writings in this blog is intended for informational and educational materials, is not an investment recommendation. We are not responsible for any losses you suffer as a result of using the information in the blog ini.Akan but if you want to share the profits derived from the utilization of our information, we will be happy to accept it. Jakarta December 21, 2007.
SUNDAY, DECEMBER 16, 2007
MONITORING ECONOMIC CRISIS - XV
(End 2007) REVIEW CAPITAL MARKETS & GLOBAL ECONOMY 2007-2008 Topics Kali's THE MOMENT OF TRUTH RECENT DEVELOPMENTS credit squeeze STORY SHORT PROCESS OF OCCURRENCE OF CRISISPREDICTIONS 2008 AND FUTURE CRISES AND OPPORTUNITIES FOR THE MOMENT OF TRUTH In 2007 and 2008 was a time of the moment of truth, future determination to fight the bear camp with the rest of the capital. This assessment is based on my predictions a few years ago. And during 4 years of skill to invest in bear market (a market where stock prices tend to decline) learned, honed and perfected. The time had arrived.
There I remember about what I often predicted for the past four years of recession, the economic crisis and the collapse of the capital markets. My estimate would happen in the middle of 2007. And it is always consistent. Many readers do not listen to this timing case. Is not a coincidence that since August 2007, I made a series of articles entitled " Monitoring the Economic Crisis ," as if I am convinced that the economy is crystallized to become a crisis. Making the heading " Monitoring the Economic Crisis " is not without opposition. I received several emails from co-founder KlubSaham.Com (KSC) to stop in a series of it. The reason for fear of damaging the reputation of KSC because the analysis is wrong. I consider to continue the series of articles was due solely convinced that the crisis is in the process of formation. For the timing of this crisis, I pour in some of the articles in Klubsaham.com few years ago in the meeting Klubsaham.com beginning of 2003. To reduce curiosity I tried searching for old articles that mention it at KSC. For example in an article two years ago, in 2005, entitled " A year Government of SBY-JK" ( http://www.klubsaham.com/index.php?name=News&file=article&sid=45 ) I quote: ...... ... Shock many teachers predicted Doomsday.At some point, probably in the year 2006 a mad dog, or a greedy pig year 2007. Crystal ball and hong shui Imam Semar said 90% chance will happen in 2008 or sooner . Indonesia will be crushed as well. Also in the article: "Roast Chicken Of Cheap Bad Debt" - August 2005 (http://www.klubsaham.com/index.php?name=News&file=article&sid=38 ) From the above discussion, we see the cloudy crisis, which might rain will occur within the next 24 months. Maybe the rain will fall, maybe not. But, I'll get ready. Because chances are there, such as cloudy a chance of rain. First, pay off all debts at floating rates. Moving to a fixed rate. If you still have a second home or / and a car, sell first. The money saved as gold. Normally gold has an excellent performance during the crisis. What was the crisis in Russia, the crisis in Argentina, the crisis in Indonesia, its performance is good gold. Imagine that in times of crisis, people could no longer afford home loans, car loans, need money for this and that. Credit default. And you know the rest. There are many occasions. Remove the gold and buy homes, new and used cars but other again. Stock? It may also sag. (Note the words in bold. Note: 24 months after August 2005 is mid-2007) There are some basic things mentioned in the prophecy. First rising defaults in the sector of housing loans and consumer loans (car, for example). The lending rate rises. Although I say there that the central bank will raise it, raise it turned out to private and central banks actually lowered, resulting in wide spread. Many prefer the central bank to combat the credit squeeze that could lead to deflation than to fight inflation by doing pengglontoran liquidity. I can not imagine how I can foresee a relatively accurate in terms of time. Wangsitnya might come from fairly reliable sources. Some things are true about the prophecy: 1. Inflation, rising prices of almost all goods, ranging from oil, food and gold.Especially for gold at the time of the last 3-4 years at a level of $ 400 / oz or USD 100 thousand / g, now a fold in dollar terms and 2.5-fold in the rupiah. Gasoline prices reached Rp 6000, the Indonesian government was still discourse. 2. Failed to pay, especially so in the US. In Indonesia there (only in the automotive sector, especially motor credit), is not likely to spread to Indonesia. 3. Rising interest rates, it is the lending rate of the central bank dropped, but the interest rates on commercial loans rose. Actually the word commercial loan interest rate rises is konsekwesi of rising debt risk. I should have said that the risk of debt increases, it is more appropriate, but such language is hard to understand the lay reader. Credit risk is what causes the occurrence of a credit squeeze. Beginning in mid-2007, the debt- -subprime credit home loans in the US began to spread. The crisis was initially involving Bear Stearns, Citigroup and investment banks that mebungkus subprime debt into packages of securities and selling them to investors. The crisis spread to Germany (IKB & SACHSENLB) and the UK (Northern Rock), Canada and Russia because of consuming the toxic subprime packages. At the moment (July to November 2007) was a gold rally from the level of $ 640 / oz to $ 850 level. For the stock market, the confirmation Bear Market Dow Theory version has appeared in November 2007. In other words, formally the capital market in the US has entered a phase Bear. For how long this bear market? Maybe until 2009 alone, or until 2011. Depending on how fast the alignment of sectors ekomoni distorted over the years. How much faster mal-investment and bad credit can be destroyed Overall, the forecast was not too bad for a economic analyst part-time. RECENT DEVELOPMENTS credit squeeze latest development credit squeeze are the central banks of several countries, USA, Canada, England, Europe, and Switzerland come together to handle the credit freeze. This reflects the panic the central banks of Europe and America. Central banks unite to distribute credit through an auction. Collateral or practical collateral can be anything, including subprime debt instruments that can not be accepted by commercial banks. With the merging of central banks lending is expected to be uneven in places where only the credit freeze. The Fed will temporarily impose a Term Auction Facility (TAF) auctions borrowing (temporary) cash at a rate in accordance with the results of the auction. Collateral can be anything. Besides, the Fed in cooperation with the European Central Bank (ECB) and the Swiss National Bank (SNB) to channel US dollars within the jurisdiction of the ECB (up to $ 20 billion) and SNB (up to $ 4 billion), the European Central Bank will channel the liquidity of US dollars through TAF. The Fed will supply the US dollar ($ 20 billion) and there will be a swap mechanism. Swiss National Bank will be more frequent repo denominated in Swiss francs and conduct auctions denominated in US dollars to facilitate market participants associated with the system repo Switzerland. (Switzerland as a state-based financial services many have clients who use the US dollar). The Bank of England will more often leave program repo (repurchase agreement) for short term and long term by accepting collateral anything. The Bank of Canada will more often use repo and willing to accept any collateral. what you need to ask is whether central banks attempt to evade US and the world out of recession? I answer: No. STORY SHORT PROCESS EVENT oF cRISIS In layman how the origin of the crisis can be told like this. First it was the (in) loose credit policy in the US and other parts of the world. People who do not deserve to be given credit for home ownership (against the house), the mortgage loans.Many feed the convenience provided, ranging from a low teaser interest (valid 1-2 years before switching to a floating rate), pay only the interest-only and others. Demand for homes up and trigger a rise in house prices. Then, as house prices rise, then people make the house as an ATM.Loans repaid by opening new credit with a larger amount of debt and the price of new collateral (higher). This is called home equity extraction, because there's money pocketed from this transaction mechanism and then spent. House prices into a bubble. As a result of their home equity extraction, the people of the US (felt) had more money and have the opportunity for shopping. So they are spending all kinds, ranging from SUVs, plasma tv, to children's toys.Items purchased many of China. Call it China to represent a country that has a trade surplus with the US. As a result of increased consumption in the US, the economy of the country the supplier of goods to the US also booming. Factories in China so alive, even popping up new ones. Raw materials imported from Australia, Indonesia, Canada and others. State-based materials mentahpun participate booming. In these countries the consumption also increased.But unfortunately the culture of their consumption is not as powerful as the US. Asia, especially, they tend to save or invest instead of going to consume, because the background of their lives were not safe (secure). Returning again to the US. On American soil there, mortgages (debts of housing) is packed with other debts and made the packages CDO (Collateralized Debt Obligation), SIV and many other acronyms acronyms are essentially the same. And these packages are sold to investors. Packaging notes are also insured so that in case of default is no insurance that guarantee. It seems good, but in practice sontoloyo. AAA rating is given on the package containing the class B debt even non-investment grade. Some debenture AAA only insured in the insurance type A. So if someone fails to pay, can not be covered by insurance. As long as home prices rose, the above circumstances could still continue. But it is necessary injection of liquidity that increasingly large. In other words, such things can not go on. When the subprime borrowers discharged his honeymoon with teaser interest and must pay a floating rate, they can not afford and had failed to pay. The case of subprime debt spread. The debtor was forced to surrender the collateral. Bank to auction the collateral mortgage. In addition, new homes are still popping up as many unfinished. There is a lag between the occurrence of subprime case with the cessation of the construction of new homes. Stock piling home. Then apply the law of demand-supply, housing prices go down. If house prices fall, mortgage borrowers begin counting, suppose lower his price or expected to be lower, then they will seek his release. Should not be sold, it is better left to the bank. Bank hit the stone. IOU many unsold as investors feared the packets containing Suprime loan. Borrowing and lending of money between financial institutions becoming difficult because of their unbelief, what to do with the funds? Want to be involved to a sector that has been contaminated by subprime? That the credit squeeze. So anyone who touches? Banks that give loans, investors who buy debt and underwrite insurance if there is a loss and default on debt. Messed up is not it? Now you can answer whether the Fed rate cut can solve the problem? Is the injection of funds into financial institutions such as Citigroup or Countrywide will help avoid losses due to the value of the collateral given by the debtors lower than the debt of the debtor? PREDICTIONS 2008 AND FUTURE If you are clever enough, you will already be able to describe what happened in the year 2008 to the year 2011 . In summary: 1. Tsunami defaults on housing loans sector will hit the US, and the largest in the middle of 2008. Freezing credit worsened, unless the Fed had a breakthrough, I do not know at this time. The implication is that investors will try to reach any assets that could diliquidasi to pay its obligations. The stock market is depressed. There is the possibility of gold also came under pressure due to liquidity needs could not be fulfilled. 2. The subprime sector was small, but had a domino effect could drag on other sectors. Bankruptcies in the financial sector including insurance will increase. 3. Consumption drives the world's economic growth since 2003 will decline due to the lack of resources that can be extracted again. And this will make the recession in the US. The recession in the US will spread to China as a supplier of consumer goods to the US. Domino effect spread to the commodity sector of raw materials, steel, nickel, copper, oil, coal ..., demand decreases and gradually it drops. 4. Excess capacity to meet the consumption style of big wedge of the pole, a mal-investment. Mal-investment is what should terbabat first so that the economic system back to normal. 5. Some analysts say that today many petro dollars, especially in the Middle East as well as the dollars accumulated in China. The entry into US dollars and stabilize the capital market in the US. The flow of funds is manifested by the low yield of treasury bonds and also the stability of the stock exchange in the US. Also inflow of funds amounting to $ 7 billion from Dubai to Citigroup. I was dubious for two reasons. First, the owners of these funds so stupid to enter the market without a strategy. If you can buy at a cheaper price, why not. Both hard for this funding to maintain US market. The owner did not have a moral obligation to stabilize markets in the US. US government just does not do it, why do the Arabs and the Chinese do it? 6. Chances rupiah weakened against the Euro. Against the US dollar weakening smaller chance of euros. US dollar will initially Rebounce, but then weakened again. Yen carry traders, will gradually behind the cage and make the yen strengthened. For the Rat, 2008, the stock market is still bearish atmosphere and economic dirudung chances of slowing down even in some countries are already in recession. Mice that according pribon China has the character of the land on the water. Apparently for the land that floats on the water will be broke down. Mice as animal pests, rodents could symbolize that year 2008 is the year that berhama. Divination is projected forward from the events of the past. Basically no one knows what will happen in the future.Forecast would be wrong to change human behavior from past habits. Do central banks have tips that are very different from the past? Is the economic actors also behave very differently from the past. Eg China, India, Russia and Arab. Such being the case, the economic cycle will be interrupted and changed at all. CRISIS AND OPPORTUNITIES Every crisis is always a chance. According to Dow theory, the US stock market has entered a bear phase, as long as there has been no confirmation of the market reverses direction, then the market is still in a bear phase. I estimate that could be for 2-3 years. So if you are a speculator, trader true, it was time to take a short position. Shares of favorites, the term Wall Street darling, which has a valuation has reached ridiculous levels, such as Amazon (AMZN), Research in Motion (RIMM), Google (GOOG), can be monitored to be candidates for shorting. Also emerging markets such as China (through fund FXI), Hong Kong (EWH), and others. If the financial and housing sectors have been corrected enough in, other sectors still not too severe, so the risk is still small to short. My favorite is the consumer discretionary sector (XFY) and the transportation sector (IYT). I would also take a short position for the mining and oil sector. If you are not aggressive enough, gold is the best choice. But gold may be corrected slightly, before rising again. When the correction should be an opportunity to add to the position. At the time of correction harsu seen as the movement of gold from weak hands to strong hands of investors and have great confidence. Reflasi efforts by the Fed and the central banks of the world will make the price of gold rose. Anyway, the current gold price is still relatively cheap. Fair value is around $ 2000 / oz. So the price of $ 800 / oz, still cheap. Up here first, congratulations Eid al-Adha. Do not forget your obligations sympathize poor. Cut Qurban was sufficient and do not be stingy. Keep your investment and savings fine. Jakarta December 16, 2007.
