Does anyone know why there was a dramatic drop in the last few days??

der

its obviously something to do with the subprime loans market in the US

God, do i have to spell everything out for you people

people have programs which say when it hits 88c SELL SELL SELL

for same reason when the wsx or whatever went over 10k the first time it dropped really quickly

It's due primarily due to the US's dual deficits syndrome (Foreign and Fiscal) which have been spiraling out of control since Bush got into power.

Whatever one thinks of the Iraq war, the US's expansionary military policy has gotten them into a lot of financial s*** considering Bush cut taxes at the same time.

In foreign currency trade, every time the US wants to run a fiscal deficit they have to issue bonds, and they need to find a buyer for those bonds. Now you can only issue so many bonds (paper money) before people start to wonder, "Am I going to get my money back?"

This is what's starting to happen now. The exchange rate is the price of buying US money, and what its decline against every other currency is saying is "$US ain't worth jack s*** any more."

The Euro is set to become the dominant global currency soon and the only thing keeping the $US afloat is it linkage to OPEC oil contracts. Once OPEC break this nexus then expect a serious dive in the $US rates.

In fact, not many people acknowledge it but the US is so debt laden that it is basically bankrupt.

Don't say you haven't been warned....

that explains why its in the 80s but not the sudden 4c drop

Due too good trade of minerals with other nations it was forecasted to hit 90c by the end of the year... You think this is still possible? $5000 invested at AUD/USD85c is $50000 profit by the time it hits AUD/USD90c. I missed the boat last time but im ready now... if i got in when i heard that forcast I would of made AUD$35000 in about a month.

Better exchange = more books I can raid off Amazon.

stronger the aussie dollar = lower the oil prices, lower the pc prices

its win win for everyone because we all need more petrol and computar bits!

that explains why its in the 80s but not the sudden 4c drop

All markets (in fact people in general) are herd driven. There is no reason the $US dropped 4c overnight, it's just that the herd finally decided to bolt. This happens over and over again through the history of the financial markets and people just stand there scratching their heads going,"Now why did this happen."

There is no why, it just happens. That's why if you try to pick the top you're a f***en moron that deserves to lose everything.

don't worry zylox the $US will drop a s***load further. invest everything you have now!! (ps. currency trading is for crazy speculators).

He's talking bout the Aussie dollar dropping you idiot.

whichever way it dropped there is no reason why. idiots on computers controlling billions of dollars of other people's money, most likely drunk or high on coke or speed.

you figure it out. ABN Amro's modeling indicates the Aussie heading to 95c though, last I checked.

It's due primarily due to the US's dual deficits syndrome (Foreign and Fiscal) which have been spiraling out of control since Bush got into power.

Whatever one thinks of the Iraq war, the US's expansionary military policy has gotten them into a lot of financial s*** considering Bush cut taxes at the same time.

In foreign currency trade, every time the US wants to run a fiscal deficit they have to issue bonds, and they need to find a buyer for those bonds. Now you can only issue so many bonds (paper money) before people start to wonder, "Am I going to get my money back?"

This is what's starting to happen now. The exchange rate is the price of buying US money, and what its decline against every other currency is saying is "$US ain't worth jack s*** any more."

The Euro is set to become the dominant global currency soon and the only thing keeping the $US afloat is it linkage to OPEC oil contracts. Once OPEC break this nexus then expect a serious dive in the $US rates.

In fact, not many people acknowledge it but the US is so debt laden that it is basically bankrupt.

Don't say you haven't been warned....

Yes but what about the record profits by Conoco, Shell, ExxonMobil, Raytheon, Boeing, Haliburton etc? They seem to be doing pretty well thank you very much

Also Raytheon Boeing Lockheed etc look to be making a nice profit with the deals Bush is doing to coutner all the tax cuts that you mentioned earlier


Aid to Israel
Military aid to Saudi Arabia


And even more money to be made in other parts of the world by setting nuclear deals to steady the balance of power China has made
Here


last edited by Le Infidel at 17:38:49 30/Jul/07

most likely drunk or high on coke or speed.

s*** i should be in money management, sounds like those guys know how to party!

plus the RBA is tipped to raise interest rates within the next couple of months, if not next meeting. that will increase the demand for aus currency driving the AUD higher.

dont worry too much about what the US economy is doing till bush leaves power and someone gets in who actually has a brain and isnt trying to fudge the economies downward indicators to try to make it look like he is a great economist..

US is in big trouble.. and have been for at least 5 years.. you can lie to the public for only so long before the financial pressure cooker US calls a fiscal policy explodes

the big indicator was the dow hitting 14k.. about 4 years ago there were 'crackpot' analysts predicting 14k back then.. everyone laughed it off.. because the fact that if the US economy went that high then it was basically telling everyone to stock up on baked beans and long life milk cause a crash was just around the corner...

only time will tell

also alot of money is pouring out of US bonds and into EU bonds.. also traders are getting nervous and buying up big in bonds.. i think a minor stock market correction is just around the corner..

buy resourse stocks related to china, buy aaa EU bonds, keep cab.. and stock up on baked beans just in case

last edited by Superform at 18:24:48 30/Jul/07

Yes but what about the record profits by Conoco, Shell, ExxonMobil, Raytheon, Boeing, Haliburton etc? They seem to be doing pretty well thank you very much

record profits by 3 oil companies and 3 defense contractors? Who would have thought?!?!?! I mean, its not like the oil companies just doubled their prices with almost no loss in sales, because people have no alternative. Also, Iraq.

I think that was his point?

All I meant by that is without those companies profiting the US company would be even worse off than it is. Halliburton isnt just a defence company either, theyre heavily into logistics and construction and contract several other companies to do their bidding.

last edited by Le Infidel at 18:31:52 30/Jul/07

the US economy is worth 12 or 13 trillion US dollars. it's quite a big bigger than all of those companies put together.

I think what this needs is a derail.

So if the US hadn't invaded Iraq they wouldn't be in this s*** awful mess. Discuss.

yeh, I know, I was just poking fun

you can bet though that record profits from those companies are in some part due to record-setting efforts by their accounting department to help them pay as little tax as possible

You are right, the economy is quite a bit bigger than all of those companies put together but you have to understand its one big synergy ie without the oil companies doing well and providing cheap oil in the states Detroit companies would not be doing so well either.

Transportation of food around the country which is by trucks would be much more expensive, those companies mentioned are now a lot bigger than you think.

I think what this needs is a derail.

So if the US hadn't invaded Iraq they wouldn't be in this s*** awful mess. Discuss.

Exactly, while it may seem offtopic the fact is that a lot of currencies around the world are tied in with the US dollar, it is not just our good old Aussie dollar. If you look at world markets countries which do not have their monetary systems tied in with the US currency area booming.

You are right, the economy is quite a bit bigger than all of those companies put together but you have to understand its one big synergy

ya rly. i study economics mang.

Exactly, while it may seem offtopic the fact is that a lot of currencies around the world are tied in with the US dollar, it is not just our good old Aussie dollar. If you look at world markets countries which do not have their monetary systems tied in with the US currency area booming.

what do you mean by "tied in"? which countries are you referring to that are booming?

countries whose currencies are pegged to the greenback?

yeah but hardly any economies worth worrying about do that any more. a few arab, a few south american and a few pacific countries is about all that's left iirc. hong kong would be the only significant one. even china did a dirty float a couple of years ago.

not to mention the price of eggs at the markets in africa on the full moon with a king tide whilst the indonesion are stunning the fish with explosives under the water.

Interesting replies keep em coming

Where China invests its money is what will count, and while it'll slowly pull it out of US bonds, it won't all be going back in to Euro bonds. The Chinese government recently announced that it had a change of heart over bonds.

Due too good trade of minerals with other nations it was forecasted to hit 90c by the end of the year... You think this is still possible? $5000 invested at AUD/USD85c is $50000 profit by the time it hits AUD/USD90c. I missed the boat last time but im ready now... if i got in when i heard that forcast I would of made AUD$35000 in about a month.

I think you should do that maths again? Or did I miss something?/

not to mention the price of eggs at the markets in africa on the full moon with a king tide whilst the indonesion are stunning the fish with explosives under the water.

Interesting replies keep em coming

how about this then ? I'll admit I dont study economics or anything like that so my opinions may seem oversimplified and maybe even wrong but I try to understand as much as I can from whatever is on the news/net/whatever I see happening overseas

K£1 = $2.0388 ftw! was 2.06 the other day.

yeah earning euros is f***in sweet too

ja, its getting strong! the brits are gonna spew when its £1=€1

The dollar dropping is actually a good thing.
Makes our exports easier to sell.. (ps. the reserve bank may have just sold off dollars)

Our dollar was overvalued anyway.


The only possible downsides are more expensive imports (which actually a good thing).

And it makes it easier for the Reserve bank to raise interest rates.

Re interest rates:

I read in the paper the other day that the ASX has copped a pretty severe beating in the past week, reportedly worst since the twin towers thing.

The guy was saying that Ian McFarlane (sp? Reserve Bank dude) pays a lot of attention to the stock exchange when they sit down to consider whether to punch us in the wallet or not. Everyone was claiming that a rate hike of a quarter basis (.25%) was almost a shoe-in, but now they're talking about staying firm for August.

If rates go up again at the next RBA meet, I reckon that will be the final nail in the Government's coffin.

Due too good trade of minerals with other nations it was forecasted to hit 90c by the end of the year... You think this is still possible? $5000 invested at AUD/USD85c is $50000 profit by the time it hits AUD/USD90c. I missed the boat last time but im ready now... if i got in when i heard that forcast I would of made AUD$35000 in about a month.



I think you should do that maths again? Or did I miss something?/

ROFL.

ian macfarlane was the previous governor of the RBA. the current governor is glenn stevens.

the RBA wouldn't take the ASX into account at all when deciding whether to move the cash rate. the primary goal of the RBA is inflation targeting. they aim to keep inflation between 2%-3% as most macroeconomists these days agree that it is the best level for long term growth prospects.

they sometimes might consider what phase of the business cycle the economy is in, but this is of much less concern than the inflation level.

the reason people are lowering their expectations of a rate hike is because the AUD is performing so strongly (or conversely the USD is performing so weakly). this is causing imports to be much cheaper, hence lowering CPI figures (inflation).

the ASX isn't really used as any kind of serious economic indicator except possibly over the long term because it is so volatile and is affected by so many things that have nothing to do with other economic indicators.

edit: ps. i agree that if rates go up again the coalition is probably done for. but interest rates have absolutely f*** all to do with the government - the australian public are just retarded. (so is john howard for claiming he could keep them down, like he has any serious influence over them)

edit2: also, you might not remember if you read the article a few days ago but were they referring to the ASX itself or the ASX200 index? cause both have taken a hit recently but it seems to be a routine correction from what i can see. take a look at this. it's a 6 month chart showing the performance of the ASX, ASX200 index and a moving average of the ASX. you can see a dip at the end of july but it doesn't seem to be any more severe than what happened in february this year. not trying to have a go at you at all, if you could find a link to that article or anything i'd be interested.

last edited by taggs at 11:28:09 31/Jul/07

this tightening cycle of interest rates is probably 1-2 years too late. the property boom has already geared everyone to their eyeballs.

now the slow burn of these increases is going to crucify many. it's gonna be great buying times ahead.

^

chicago school of economics + monetarism ftw.

edit: ps. i agree that if rates go up again the coalition is probably done for. but interest rates have absolutely f*** all to do with the government - the australian public are just retarded. (so is john howard for claiming he could keep them down, like he has any serious influence over them)

If the Liberal Party gets axed at the election because rates go up again they have nobody to blame but themselves. They totally stuck their neck out by making the outrageous claim that the Government has control or a large influence on rates in the first place. They're 100% backed into a corner on that issue.

Even a complete economic nub like myself realises that its a dumb call - maybe that's their only out, that nobody with half a brain will take it seriously.

Here's the thing though - does anyone *actually* believe that Labour would actually make decisions any differently to what Liberal have on many major points? They can certainly make noise and vote the opposite on issues even when they don't believe it's in the best interest of the country so long as they know that enough Liberals will vote for the issue/against them to stop their (sometimes deliberately) incorrect decisions becoming law.

There's plenty of issues people bitch about the libs making certain decisions for which if you think Labour wouldn't have implemented exactly the same, you're blind.

I'm not trying to support either side here, just stating facts.

That said, once again I won't be voting Liberal (though I don't vote Labour either - I'll leave that open to your imagination what that means :)

Here's the thing though - does anyone *actually* believe that Labour would actually make decisions any differently to what Liberal have on many major points? They can certainly make noise and vote the opposite on issues even when they don't believe it's in the best interest of the country so long as they know that enough Liberals will vote for the issue/against them to stop their (sometimes deliberately) incorrect decisions becoming law.

The two major parties seem to cover a fairly small patch of the centre/right so they are more likely to secretly agree than disagree. Of course there are a few major differences (work choices etc) but for the most part they probably publically disagree just as an excuse to slander eachother. Which takes us back to the stupidity of the libs targeting labor as being bad for interest rates. However, if I had to guess, I think they might try to stick to their guns and in the up coming election cycle once again point out interest rates are much lower than they were under labor. It could go either way in that respect. Scare people into thinking they could be even worse off under labor, or alternatively they could switch on their brain and realise the government doesn't set interest rates.

If you aren't scared away from Labor by now, then nothing will scare you off voting for them.

/votes labor

infi wants Howard's poo-babies.

Cool replies since my nonsense, learnt a thing or two :)

My whole simplified thinking was that any disturbance in the US economy tends to affect us and our Dollar because of lower uptake of Australian resources feeding China's production lines to the US.

why not, have to be better than the s***stains KRudd would give father.

You're just cranky because if he gets in you won't be able to fire people for not signing some AWA that removes their holidays.

pft holidays schmolidays. who takes those...

Due too good trade of minerals with other nations it was forecasted to hit 90c by the end of the year... You think this is still possible? $5000 invested at AUD/USD85c is $50000 profit by the time it hits AUD/USD90c. I missed the boat last time but im ready now... if i got in when i heard that forcast I would of made AUD$35000 in about a month.

that math is definately right ive been following the forex market for about 4 months. I find it piss easy... check it out... i forgot to mention that all those big figures are in USD 5000, 50000 and 35000 .... CHA CHING!!!

you do realise that currency speculation is probably one of the most risky types of short-term investments there is?

currency speculation is how the NAB lost hundreds of millions through those rogue traders, and also how Barings bank in the UK suffered a similar thing.

currency prices (e-rates) are affected by giant institutions buying and selling aboslute s***loads of money more often then not on a whim. it's closer to gambling than investing imo.

edit: i'm sure it all looks good in hindsight but i'd consider the risk you're taking on before you committed to a large sum like that. my 2c.

last edited by taggs at 07:11:00 01/Aug/07

if you are betting on absolute moves then you are opening yourself up to big risks. learn some money management. even if you are making good trades if you are making them too large and too risky then you can give yourself an unacceptably high risk of ruin.

Short term anything can happen with exchange rates as people dump and buy at random. However long term they should follow a trend relative to the health of an economy... unless someone dumps a lot, people panic, it snowballs and a currency goes into freefall.

Your maths are only correct if your trading on some rediculous margin like 100:1, in which case ur f***ed if you buy at 88 and it drops to 84.

Zylox, you're saying that you've made almost 1000% profit in a short time? Unless you tell us more, you are full of s***.

Or you actually think you've made that much and you are just retarded.

Zylox, you're saying that you've made almost 1000% profit in a short time? Unless you tell us more, you are full of s***.

Maybe he was selling Zimbabwe Dollars for US Dollars, then buying back ZWD a few months later. 250ZWD = 1USD atm. With their massive inflation, selling 1 ZWD for 0.4 US cents (USD0.004 to be clear), when it inflates another few dollars, as it is, he'll get ZWD2750 back! Voila, 1,000% profit!

Or he's just a f***ing retard.

i thought he meant putting in $50,000 to get $5,000 profit and just got it around the wrong way =/

Futures and currency trading (worse yet currency futures)are gambling not investing.

You can make s*** tonnes quickly and you can lose just as much just as quickly.

From memory the Barings bank collapse was caused by 1 trader playing futures and currency in the form of bank bonds ?

http://www.news.com.au/story/0,23599,22172007-2,00.html

ouch... my WOW shares took a hit:/

Surely that's not unexpected given the way the Dow has been over the last week or so....

Then, almost before you could catch your breath (or cash in your profits), we had last week, with the Dow dropping 585 points and the total stock market (as measured by the Dow Jones Wilshire 5000) losing a cool $1 trillion in value. One day, the sky's the limit. The next day, the sky is falling.

link.

It's only a worry if you leveraged and you get a margin call.

http://img266.imageshack.us/img266/6104/f***ersiu4.jpg


last edited by sLaps_Forehead at 23:38:40 01/Aug/07

C'mon Aussie - slide a bit further so I can shift over some of my greens for xmas spending and other investments.

Fkn USD. :(

lawl you clowns are clueless.

In news to hand the company I work for generated about 90 basis points of positive operating leverage, USD 1.92 billion revenue for Q2

that's how we roll ;)


last edited by HeardY at 08:12:31 02/Aug/07

live by the sword, die by the sword ;)

Zylox, you're saying that you've made almost 1000% profit in a short time? Unless you tell us more, you are full of s***.

havent made s***... I said i missed out. Im only paper trading at the moment.

OK EXPLAINED:

AUD/USD .8500* to AUD/USD .8600 = 100pips *US.85c buys AUD$1
AUD/USD .8500 to AUD/USD .9000 = 500pips

USD$5000 invested returns USD$100 for every pip gain

So for AUD/USD .8500 to AUD/USD .9000 = 500pips

500 x USD$100 = USD$50000 PROFIT

lawl you clowns are clueless

...

In news to hand the company I work for

heh

oh i get it hes a one of them robot things from star wars that is part of the company