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Fellowship of the Shares

cool !! Nice map!

 

The small core CPI increase leaves the year-over-year increase at a very modest 2.2% from 2.3% the previous month.  That is below the Fed's expectations for this year.  The rate of increase the past seven months is below 2%.  There is a strong argument that inflation rates are easing in the US, not increasing.  At least, that is what the hard data show.

Of course, everything changes, but the fact also remains that the US economy is growing below the long-term trend (potential) of 3%. Above that, inflationary pressures build.  Below it, they usually ease.  Economists are virtually unanimous that growth will remain below 3% this year.  This is far more important to the inflation outlook than what happens in China. 

Remember, the US economy is by far the largest in the world.  The growth in the US economy in just the past three years exceeds current Chinese GDP.  That is, the US has added the equivalent of an entire China in just three years.  (Here is a fun chart that compares US and overseas economies.) The tail will not wag the dog.  It is the US data that is important.

Stock futures are sharply higher as a result of the CPI data.  The fact that the total rate was up 0.7% is not worrisome.  The year-over-year increase in total CPI is a relatively tame 2.7%.  Global energy prices have stabilized recently. 

 

jerome, thanks for acting on my behalf of the "entertainer" (skin cannot get any thicker liao and cityspring still dun wan to gif a price for my skin to be made into a "infrastrature for military warfare", hahaha).. btw, how r you?

 

shijiez, I didn't "gone" la bt just "adjusting" myself and coming to terms of "surviving" in the "unfairness system" and "superb-political" of being an employee.. (there are a lots of "political camps" "occupied" by "smiling faces, hidding daggers" people in my workplace). and i can't just post as i wish as there are lots of "snipers" around me.. sad..

 

elfin, you never contact me privately.. sad... detaching from your family of pets liao...

 

and heard a lot of "market rumours" or "hot tips"... my ears now like elephant liao... "poof like a wind"...

 

elfie,

Re UIC : Telegraph and JG Summit are part of Gokongwei group.

 

Hi eastonbay

I am well,thanks.How are u keeping?I have been reading the posting and learning from it too.

Been in touch with my 2 goddaughters too. 

 

Eastonbay... :)

I find there's really a lot to learn from your observations and valuable insights... :)

Cheers! 

 

keke, they're all busy lah...am in contact with them privately tho. :)

StA: hahahah! at least this time you're listening to me and holding on. not like china energy. :P will continue this up and down, since trading counter as well. but if this macrotrend holds, i'll give you abt another 15 trading sessions to hit the 1.8 target.

check back on you then for my hp. ;)

hahahahha!

cheers to you all. waiting to knock off liao. has been a long week. sigh.

 

singaporegal: prove by contradiction... the market went up today against SGH Index... so disproved the theory. Now you can go on holiday without having to carry this additional baggage.

 

elf: Hi hi. Your entire family and gang of pets have somehow disappeared.. the bunny, kitten and puppy.. what has happened? They have all gone quiet. This place looks a bit haunted without them. Even you godpa, been quiet for a while and emerged in SPC thread only today/yesterday. So, next week you are on leave. You will be posting more?

 

hehe. See what's happening in Bangkok this few days? remember my call when you first said you might be going there for shopping trip. At least I can boast now that I hit the jackpot sometimes! (actually I'd rather I hit the stock jackpot)

 

*grinning* I'm still holding on to StA! Although it's a miserable 5lots. In the previous round, it cheonged up to 1.30+ (or more, can't remember) and got beaten down back to 1.10+. I didn't throw it. Was thinking of increasing holding then but used up my funds in other counters (incidentally cosco ). Essentially, I 'buy and hold' because of the biz they are in. It's is only 24c more to your prediction of 1.80... yeepee!

 

keke, since77, i'm a techie. techies are pragmatists by nature.

as much as i know my kind of TA, i wouldn't rule out the possibility that i'm making money simply because this market is a bull market, that practically any stock one buys will go up. ie, there's the distinct possibility that I might just be lucky.

pays to be cautious. bull and bear market are very different. the real test of a trader is making money in a bear market.

when i can achieve the above, then can consider quitting. before that is premature.

remember, never overstep your techs.

keke. cheers! :)

 

or better still..find a job which allows u to monitor the market closely..then u can pretend to work fulltime..yet trade fulltime! =)

sigh...cavs lost the nba finals..wat a bummer..

 

haha....elf...

tat case, doesnt it make sense to quit ur job and trade fulltime?

 

 

 

singaporegal! *hugs* meh. elfie's heart is sore. meh meh mehhhhh.

haha. anw, thanks ed88ks for the articles. 2nd one was very enlightening. :)

market-wise, be careful ppl. market appears strong but it's actually weakening; mixed market scenario.

well, at least i'm gonna be on leave next week. so can possibly do some scalp trading. i make more income when i'm on leave than when i'm at work man. haha. not good. sigh.  

cheers all, keep happy.

 

we look back at the historical performance of the Dow Jones Industrial Average and overall US economy over the same period.

Put two and two together and we get the following details:

• October 1981 to September 1992: Fed slashes rates from 20% to 3%. This period includes a powerful economic recovery and a soaring stock market, yet also sees a debilitating energy crisis, the worst unemployment rate since the Great Depression, and the infamous stock market crash of 1987.
• 1992 to May 2000: Fed lifts rates from 3% to 6.5%. The US enjoys a pan glossy ?New Economy,? a technology boom, GDP expansion, a 30-year low in unemployment, and a bull ride in stocks to the never-before-seen 10,000 mark.
• May 2000 to December 2002: Rates cut from 6.5% to a half-century low of 1%. Loosening the spigot of easy money did nothing to stop the tech bubble bursting, and the longest losing streak in the DJIA since the Great Depression.
• January 2003 to June 2006: Rates are lifted from 1% to 5.25%. Despite the rise and fall of a seven-year long housing bull, US Stocks continued to rally to all-time record heights as Wall Street celebrates the return to ?the New Economy.?

 

Factors Affecting the Future

The stock market is concerned that pressures may develop to push interest rates even higher.  That is always possible, but right now it seems like a long shot.  Here are the facts.

Economic growth is certainly picking up.  But it is a long way from exceeding the long-term trend of 3% real growth.  

First quarter GDP growth was at just a 0.6% rate.  The Federal Reserve and virtually all top economists forecast that growth will move higher through this year, but remain below 3%.  At that level, the pickup in demand simply does not create substantial inflationary pressures.  Productivity gains and global pressures will keep prices in check.

The current inflation numbers reflect this.  The core PCE deflator, which is the Fed's preferred measure of inflation, has been dropping.  The past two months the changes were 0.0% and 0.1%.  The year-over-year increase has come down to 2.0%.  That is at the low end of the Fed's 2007 forecast of 2.0% to 2.25%.

The picture does not change when considering the total PCE deflator.  It is up just 2.2% over the past year. The inclusion of food and energy commodity prices do not alter the analysis.  The PCE deflator is below the 2.7% year-over-year increase in total CPI, and using the PCE data creates even higher real rates of return than those noted above.

There is, of course, the risk that rising commodity prices lead to additional inflationary pressures, but that risk is limited.  Commodity prices have been rising for years and there has been little impact on inflation.  Commodity prices comprise a small percentage of cost for business (less than 10%) and their impact is typically vastly over-estimated.

The fact is that economic growth will remain soft through at least this year, and inflation remains well contained.  The Fed is not going to let inflation pick up substantially, and the current level of rates is already restricting economic growth.  These conditions suggest little upward pressure on interest rates.

Why the Fear?

The rationale for fears of higher rates seems to be that rates are rising around the world, so they must eventually rise in the US as well. 

There is some truth to that, but ultimately US rates will be overwhelmingly determined by US conditions as reflected in GDP and inflation.  The fact that the New Zealand central bank raised its benchmark rate to 8% last week, which spooked the US bond market, has virtually no implications for US rates.  Japanese rates are far more important, and the central bank target rate there is just 0.5%.

Rising commodity prices and strong global economic growth are certainly factors in setting US interest rates, but there is no reason to presume that these conditions suddenly warrant sharply higher US rates.  For the bond market to suddenly become fearful of Chinese economic growth and New Zealand interest rates reflects a market acting on fear rather than reason.  by dick green

 

hi da gege,

yeps, got that abt the residential vs commercial deed.

oh ok then. fits into picture. rem what i emailed you before, abt the % of UIC in public and private float? that my guess is that they're close to a GO since at least 78% of UIC is in private hands alr (the AR)...

if you look at the time of the share buying and the rates of conversion, there's another party, Telegraph Developments. they buy mostly same day as Gokongwei. i believe they're on his side?

MS, i'm not sure. kingmaker, definitely. 11% of UIC is in their hands. As a corporate entity, they probably will side no one (from time of announcements tho, if they're siding someone, it's Wee CY), but will let the two fight it out, and reap the 25% premium of ave last 5 days when UIC is taken private.

worth a gamble, really. rem the target i called for you? looks like this might happen.

 

 

singaporegal,

No worries lah......go have a good time.

The bulls will return with you.....let the bears have their day. ha ha ha

Have a good trip.

 

Hi shplayer,

Looks like there's nothing to worry about the SGH thing because there's no bear in sight!

I can go on holiday peacefully! Yeah! 

 

Elfie,

UIC recently acquired the balance of about 21% of UIC Building it did not own for $126m with the intention to converting it to a luxury residential apartments.

Because of the shortage of commercial properties, the authorities recently stopped granting permits to convert commercial to residential properties. This ban will remain in effect till 2009.

The 'downside' for UIC is there is not going to be quick profits for UIC in the sale of luxury apartments.

The 'upside' is commercial rents are still experiencing strong uptrend....rental revenue stream will improve.

The 'unknown' is if or when will the tussle for control between Gokongwei and Wee CY erupt....with Morgan Stanley playing the king maker.

 

 

17:05:01	0.140	88,000	Sell Down
16:51:29	0.140	56,000	Buy Up
16:49:47	0.140	50,000	Buy Up
16:48:19	0.140	7,000	Buy Up
16:43:46	0.140	37,000	Sell Down
16:36:54	0.140	20,000	Sell Down
16:36:27	0.140	5,000	Buy Up
16:35:56	0.140	10,000	Buy Up
16:35:46	0.140	40,000	Buy Up
16:30:08	0.140	100,000	Buy Up
16:29:55	0.140	7,000	Buy Up
16:27:16	0.140	10,000	Buy Up
16:26:32	0.140	20,000	Buy Up
16:26:07	0.140	138,000	Sell Down
16:25:13	0.140	10,000	Sell Down
16:25:13	0.140	150,000	Sell Down
16:24:59	0.140	50,000	Sell Down
16:24:48	0.140	483,000	Sell Down
16:24:48	0.140	520,000	Sell Down
16:24:47	0.140	700,000	Sell Down
16:22:26	0.140	200,000	Sell Down
16:20:23	0.140	20,000	Sell Down
16:17:55	0.140	10,000	Sell Down
15:21:10	0.145	20,000	Buy Up
15:18:56	0.140	20,000	Sell Down
15:14:41	0.145	100,000	Buy Up
15:08:18	0.145	50,000	Buy Up
15:04:36	0.145	50,000	Buy Up
15:01:39	0.145	10,000	Buy Up
14:50:26	0.145	50,000	Buy Up
14:43:32	0.145	100,000	Buy Up
14:43:01	0.145	50,000	Buy Up
14:41:49	0.145	50,000	Buy Up
14:41:07	0.145	8,000	Buy Up
14:40:36	0.145	50,000	Buy Up
14:40:22	0.145	100,000	Buy Up
14:40:02	0.145	10,000	Buy Up
14:39:52	0.145	30,000	Buy Up
14:38:38	0.145	2,000	Buy Up
14:38:21	0.145	200,000	Buy Up
14:38:14	0.145	30,000	Buy Up
14:38:13	0.145	50,000	Buy Up
14:37:54	0.145	50,000	Buy Up
14:37:49	0.145	100,000	Buy Up
14:37:40	0.145	50,000	Buy Up
14:36:25	0.145	50,000	Buy Up
14:36:22	0.145	50,000	Buy Up
14:35:49	0.145	500,000	Buy Up
14:35:38	0.145	200,000	Buy Up
14:35:22	0.145	50,000	Buy Up
14:33:49	0.145	15,000	Buy Up
14:33:48	0.145	38,000	Buy Up
14:33:29	0.145	70,000	Buy Up
14:33:28	0.145	47,000	Sell Down
14:33:26	0.145	141,000	Sell Down
14:33:26	0.145	10,000	Sell Down
14:33:25	0.145	510,000	Sell Down
14:33:24	0.145	150,000	Sell Down
14:33:23	0.145	2,000	Sell Down
14:29:31	0.150	10,000	Buy Up
14:27:37	0.150	100,000	Buy Up
14:27:15	0.150	100,000	Buy Up
14:24:28	0.150	2,000	Buy Up
14:24:27	0.150	1,000	Buy Up
14:23:14	0.145	2,000	Buy Up
14:23:13	0.145	1,300,000	Buy Up
14:23:13	0.145	1,000,000	Buy Up
14:23:12	0.145	1,010,000	Buy Up
14:21:20	0.145	1,000	Buy Up
14:20:56	0.140	20,000	Sell Down
14:18:50	0.145	100,000	Buy Up
14:15:56	0.145	1,000	Buy Up
14:11:21	0.140	100,000	Sell Down
14:10:44	0.145	50,000	Buy Up
14:03:07	0.145	1,000	Buy Up
14:01:02	0.140	69,000	Buy Up
14:00:14	0.140	20,000	Buy Up
14:00:04	0.140	100,000	Sell Down
14:00:01	0.140	50,000	Buy Up
13:59:01	0.140	100,000	Buy Up
12:29:16	0.140	200,000	Buy Up
12:29:03	0.140	20,000	Buy Up
12:27:52	0.140	300,000	Buy Up
12:19:58	0.140	20,000	Buy Up
12:18:44	0.140	100,000	Buy Up
12:15:20	0.140	200,000	Buy Up
11:23:20	0.140	40,000	Buy Up
11:08:13	0.140	100,000	Buy Up
11:04:07	0.140	100,000	Buy Up
10:57:04	0.140	50,000	Buy Up
10:57:02	0.140	50,000	Buy Up
10:55:35	0.140	50,000	Buy Up
10:43:10	0.140	10,000	Buy Up
10:30:17	0.140	2,000	Buy Up
10:16:17	0.140	30,000	Buy Up
09:57:15	0.140	20,000	Buy Up
09:47:19	0.140	30,000	Buy Up
09:46:14	0.140	100,000	Buy Up
09:44:28	0.140	200,000	Buy Up
09:43:25	0.140	15,000	Buy Up
09:42:42	0.140	216,000	Sell Down
09:40:10	0.140	100,000	Sell Down
09:39:46	0.140	104,000	Buy Up
09:39:42	0.140	50,000	Buy Up
09:38:03	0.140	100,000	Buy Up
09:35:42	0.140	96,000	Sell Down
09:33:29	0.140	50,000	Sell Down
09:33:09	0.140	100,000	Sell Down
09:31:14	0.140	100,000	Sell Down
09:31:12	0.140	25,000	Sell Down
09:30:10	0.140	100,000	Sell Down
09:28:49	0.140	10,000	Sell Down
09:23:33	0.140	5,000	Sell Down
09:05:38	0.140	42,000	Buy Up
09:05:26	0.140	658,000	Sell Down
08:59:00	0.140	85,000	Buy Up

Elf, here you go...

I dunno if this is what you meant by posting it out, but my limited intel suggests so...