Anyway, in this race to the hell, ARH was sold to $0.155 in worst case. One of my friends just sold at this price. We both had held it since October 2010. It was so fearful when XAO led the world for GFCII. And the sale on fire had all of understandable reasons based on our human instincts. Today it announced that a unbinding MOU and the main points are as followings and the trading volume is just about 500K(in short term, the price could be lower or higher. Too many worry the death of China's demand. Too many thought ARH would die in the hand of Clive Palmer. Too many thought Clive just plays the boats somewhere and forget ARH. Too many thought the failure to list in HK was the end of Clive Palmer and ARH. What if EU crashes into the ashes? The unbinding MOU could not save the sale on fire since the sky needs to be save. Would all of us be hit down by the sky? Possible but unlikely! What if the sky is there in our generations? What if China and India would not come back to the dark days before 1977? If GFCI could not destroy the resource demand, what could get rid off the demand? Could we have the natural flood, one time of 100 years, every year? Could XAO, a tiny cautious economy would lead the world into the hell? All of souls in the hell choose the hell as they wish abnormally! Why do you write so much your feeling? I want to record my true feeling when XAO tries all to rush into the hell! It is invaluable for me to know the risks at worst time and the opportunities which life logic tells us again and again! ARH has IO in the ground. Clive has being timed the market since GFCI for better return. Just a history. FDL(FMS) found IO after FMG had got huge IO in FDL's tenement. I felt the hot of IO and bought in before FDL started to look for IO. GFCI pushed FDL's price to $0.025 around. Then it was recovered in the bloods of the GFCI. FMS rewarded me but with other 5-20 baggers it made my head extremely hot. I felt I could control what I could not control rather than lock the good enough profit. I didn't like to pay too much tax before I could be very rich so that I get much poor now and have to cool my head down for months. I refused to monitor the market pendulum which I never dare to forget between 2004 - October 2010. Was I stupid since April? It was in fact. However we should not cut all into ground for our mistakes. In the bloods, no too many bargain hunters believed FDL could be FMS and IO is still needed by this human world. It was true for PRR, AZZ, and so on. Of course there were a few falling knifes hurts me but not bigger than 5/30 before October 2011 per year but after that my hot head made the thing terrible! My friend who sold at ARH $0.15, called me to urge me to sell. I am grateful for his kind care but I could not sell since if I sell I would break the rules and principles at the roots. There would be some light to lead us out of the pinch dark tunnel if it has a exit to the beautiful world. Before people could see the light in opening, ARH would be up/down in the hands of the bargain hunters of the day-trading or momentum-trading types. A zero sum or worse game - risk $$ for pennies. I would try all to be self-aware and environment-aware without the fears and greed synchronized with the market sentiment! I would speed up to learn how to identify the quality, the economic moat and start the transition from a dirty-cheap fisher to a value investors with enough margin of safety! It is a fearful task and a challenge for my own personality! Do hope I could finish this transition before the machines and systems control all and market become no-human land. Do hope the sky would not fall down for our generations. ): 1. It will now have access to 2 billion tonnes of iron ore. 2. A further announcement in about a month. 3. The Royal Bank of Scotland (“RBS”) have confirmed that they are keen to pursue a satisfactory engagement letter for the issue of USD$500 million in high yield notes by IM pursuant to 144-A/ Regulation S to support the development of the project. 4. MCC HK, a subsidiary company of MCC of China whereby MCC HK has agreed to assist IM to raise 75% of the project costs by way of export credit from Chinese banks. 5. MCC HK has also agreed to accept the appointment as ECP/EPCM for the project on mutually agreed terms and conditions based on the strong background of MCC HK in this area and also for securing project finance from Chinese Banks. 6. The agreement shall be on a fixed price lump sum turnkey basis and the design in accordance with the Chinese financial study agreed by both parties. 7. The MOU is flexible to allow for Chinese and or other offtake partners for product produced from the Project and IM confirms that it is also in discussions with a major trading house to participate in offtake agreements and also for a USD$600 million investment in the project. 8. IM is currently updating the financial evaluation of the Project and these updated figures will be released to the market as soon as they are to hand. Something seemingly have being done in XAO resource sectors. The environment is bad but at last when the people could see what could be in future would let the matters better if not excellent! If something would be 10 baggers, it would find the chances for itself! I wold update my mind to lower the chances for falling knifes but increase the chances for 10 baggers while I could be sure no losses to my portfolio in worst case: 1. Buy extremely low for extremely qualified fishes, swans, or castle with moat. 2. Sell along the way when the bum and genius both make the money 3. Hoard enough cash reserves when the market is in euphoria or become anxious for the party! My fatal weakness is when the market turns to be bullish I let the dream for 10 baggers overwhelm the market reality at the peak of the horizon I should hold!
Fearful in the hell lonely! XAO jumped more than 100 and stirred the fear that all of people who are alive would be in sunny days but just "me" would stay in the hell. We all expected today Europe, US, and China in the hell which caused great fear and then too many jumped into the door, home made, of the hell. They didn't cry anymore but silently jumped and jumped. Don't hold me in the hell! It is costly if you want to get out of the hell! No one tell you before? Does your system tell you so? If not, something wrong around you! If you are already in the hell, get your mind first and then if you are not unlucky, you could find chances even we could not be sure. *** XAO post its biggest one-day gain in more than two year as it post its biggest one-day losses last week. We are too easy to be convinced what we really don't know since when we mix with the crowd we are idiots as always! How could so many people in XAO believe bipolar assertions in a few days and contribute their money, life, and name to the heel and to the future hopes? It is a confirmed assertion historically: 1. market is pendulum 2. sky would be there if all of us in this global would not die in the same days. XAO seems hope that European officials would find a way to cut Greece's debt and shore up European banks. Are you sure? No! Some are the value investors; Some are the bargain hunters; Some are the guys who have been in hell who and want to get out from the hell. Nothing has been changed since if the sky is in risk all of the politicians would work together to save themselves since the common interests would bind them together. The news is not so sensational: "Euro-zone officials are working to magnify the firepower of the region's rescue fund and have begun discussing the next steps to shore up the financial system and prevent the crisis from derailing a fragile world economic recovery" and financial system. *** The crowd reacts very instinctively, a typical 'Knee-jerk reaction" for most of the market buyers or the shorters to buy for covering! However a fact the blood in the market is too deep is there and it is better to buy now. It is a sure matter if no EU collapses, the bottom should be there. In this sense, the market seems not always stupid. The medias changed the tone in days too. They started to tell how irrational the selling of mining shares such as BHP, RIO and so on. Don't stop to read the news for bad or good news but get the underlying logic and your insight for the coming future. One fundamental great thing is Australia is fare from US and EU and if the fire could not reach to Australia through the gas pipe or telecommunication channel over the ocean, everything would be back to normal sooner or later. Sale on fire is always the best friends for the prepared strong hands in the market. Unfortunately I had made me very weak this time! The good thing to myself I didn't lose my mind completely!
U Turn ahead? In the market when things become too good to be true you would be alerted by a sign something like: Unfortunately human nature could not see this sign or we just ignore any warning signs when we are cheerful in the music of the grand party and depressive in the way to rush into the hell. There are always some people they have gifts rather than our simple Knee-Jerk instinct. If we are lucky and in our partly owned business there are these people, you could find after long enough time, some great things just happen. Before the great things happen they just work and work on some great business ideas for profit. 1. How could we find these people and more important to find the business which could attract the these good people? 2. Could you believe Clive? I could not say I would trust him for my personal matters. However it was difficult for anyone to put something in the list and removed it since the price was lower than expectation. 3. To make billions of dollars, it needs the lucks and right decision at right time more often than the knee-jerk reaction. I believe Clive would think vital few much more than the trivial many. 4. Should he worries someone just sell ARH and stop his strategic plan for better return? Anyway he has 69% right of ARH. 5. Mos of times we want to be sure for some great results but we should know any 10 baggers come out in surprise. 6. We should know some bad things also could be formed before we could know surely. How to find the U turn sign when we feel too fearful or too cheerful for the cake in the sky? I feel thrilled in the market. I feel depressed in the market too. I do hope I feel at different polar as most of the people around what I really interest and I could drop off in the way when more and more people have the similar feeling as me. Of course the quality based on the fact is very important. However I really don't get the sense about the quality. So if useful, take; if harmful, refuse. Always act in the market with your own mind. Don't jump in the graves other people dig out for you! Good feeling is we could expect the U turn sign for ARH not just 36 yards away. It could mean 1K, 2K, or more. I really don't know exactly. I enjoy to see the sign of China, Huge IO reserves, Money, and this new card from Clive and ARH. Seriously saying if the drama could be in play it could last until GFCIII or longer! *** Hope we could see the similar scenes around ARH as shown in the following(I don't worry the delay but derail before we see the scenes). I am also very bad to sell the promising ones and see them leave the stations forever without me. Why don't I get the gift to have some sure senses about the future? Otherwise I don't need to bet on Clive. No gift so that I have to target my direct goals and indirect goals, which sometimes pits me off. If someone who could control me let me play in the market why don't let me fly as I wish? It is not easy to be a fool! You have to be organized, disciplined, analytical, and self-reliant, which just say no freedom at all but I really jumped into IT booming for freedom! When I just did my job and never dared to expect the 10 baggers I got some. When I just believed I could get the 10 baggers I got nothing, actually much worse. I have to be very behaved. Market is my workshop not dream land anymore. I would tell me so every day! I have to tell me the busy structural sites could be true only after a lot of efforts and times have been paid out. In the structure I have to be self-reliant and completely independent from what Clive would like to do.
Is it news significant? ARH said it will now have access to 2 billion tonnes of iron ore. It sounds very positive but when the knife of EU default and crash of the financial system hangs over each door of the market warriors, who dare to go out for a unbinding MOU? Questions based on the macro economies: a> Will China tip off before ARH could ships the IO out? It seems no too many believe so even all know it will have troubles since all of us have troubles. 70% or 30% odds for China tips off? b> What price would be for ARH share if EU and Greece were in default when and before ARH just get the MOU bound? It will show the confidence of the participants to share the benefit and risks of ARH IO. In this darkness and after failure of HK listing of Clive's resource houses, the bargains should be very tough. Business is always business. So if Greece in default and EU goes down, no one would care about Greece and all should desperately save the financial system. This system crashing down will mean no exit for anyone for better future at least for years or decades. All of people would just have a ticket to the hell. We hate uncertainties and what in hell is a mystery for anyone who is alive. So hopeless would put all to fight for the last day. The chances for the financial system collapse to ground is a little bit worse than the sky falls down. So I just think financial system is damaged very much but recoverable. In yeas, ARH with MOU should get what its business allows. If not all would go down, the bound MOU would be very valuable. The money, the resource, the demand, and consciousness in darkness, should generate a win-win business model or structure. Clive knows the value of China but he would not lose he should not which has shown in HK listing. He could say no for the matter he could not accept. You may dislike Clive but he definitely want to make the frozen ARH and his resources houses get out of the dismal mood. It is not for the desperate traders who are right up every night after they bought ARH at the price higher than $0.15. Day or momentum traders are never the business owners at least they don't think so. They just expect the good news one after another and then they don't need to stop the loss! I am a trader but I really want to understand where the business and how significant the good news will be. I could be a owner if I could be convinced ARH would mix the money, people, IO, China together. It is a very fantastic job if Clive could do his best. I do feel ARH is filling the explosive powders at the engine of its share price. Between Oct 2010 and April 2011 I had seen too many faked powders and damages of the EU default crisis. I don't want to make a run without thinking. The bottom line is that Mineralogy got shares of ARH at $0.305 in March 2011 to cover the loan from Clive and ARH's enterprise value at present time should not be less than that and the bound MOU should be negotiated from there more or less. c> If a unbinding MOU could cheer the market to double its price in two days where everywhere people just worry, what if MOU will be bound without the drama that EU just throw all into the water? The price would be back to more than $0.50 at least. What exactly price should I expect I need more reading and pondering on it. Could it back to $2.00? It seems if MOU is bound, the IO starts to ship out, or the time for all of bums and genius to make the money. I don't have clue. Why do you say so much? I want to set up my mental latices to get roughly right judgment to lock the profit or extend my profit without exposures of significant risks as I have got between April 2011 - present. Do you want to sell? I really want but I could not. Price at $0.027 still means huge discount. It was the price when GFC forced the crowd dumped everything when all of IO hopeful looked as dead ducks. The most important things the drastic down after the failure of HK list has dried any pieces of bubbles from ARH. Who is the bubbles in ARH? The bargain hunters and most of them just gone! Logically saying all of the people jumping into ARH now are the guys with some independent minds. They are not the jumpers over the fences even they could be rolled out if EU in default. Of course there are news followers of day-trade type around ARH. I get the point that 1. the new is very significant and worried market has discounted this news greatly 2. the news to bind the MOU would be much greater and it could be a light in this dark market; 3. the risk to bind MOU is there which could happen in EU default; 4. after the HK list failure, Clive seems realize that 4.1> He needs the IO out of the ground so that he could show the IO to convince the HK investor for another trying for list when the days become sunny. 4.2> He may give out more to insure this MOU to be bound. 4.3> The result should be better than the bottom line price of HK listing or at least not worse much for that. 5. I am fearful too much and all of the people around me are fearful too now. The vote at $0.27 tell the high probability it would shoot up in price if MOU is bound and EU doesn't drag the financial system onto the ground. 6. All of the bargain hunters have been hurt terribly by the resource hopefuls. They are really worrying the macro, micro, universal, and all of type of risks they could image. In a pitch dark night, all of us know the tsunami have being approached to where we are, more and more people would try to flee away to avoid losing all. You could lose all. It is real risk. Run after thinking or run as a primary animal before the nature disasters? I want to run away and forget instinctively. However I just could not believe Australia IO would be left there for another 100 years even they could have chances to dig out in years! I tried to talk some strange in Casino without experiences in stock market and they told me how bad the economies and stock market was now. How many people have to buy the potato with their gold not paper money? I could be wrong and if I am wrong, it is disastrous but it should mean the same to all of the middle classes. Are we really in this hell? My friend who sold ARH at $0.15 called me today with full of worrisome about the market. He urged me to think about the market again. He believed Greece would be in default, US would be in another recession more serious than any one in history, China would tip off, no buyers for the Australia Resources if the price could not drop down to the level in 2000. He urged me to sell and trade in the way of the downward slop. He said all of the big institutional boys are playing the game as he said. He could be right but I am not them and I could not copy them to save me! I could not agree with him. I rather pick up a spade in a workshop than jump into the heel by following the hopeless crowd. Since I played in the market I always feel shame when I am synchronized with the crowd. It is my bottom rule. I have to try run away from the crowd in hysteria or stay where I am! Don't you worry if it drops back to $0.15 or lower? I do but it is wrong to my market philosophy. I would never stop losses when we rush into the hell! I am fearful to be in the hell but I believe if I stay still in my corner I could be survival if I have any lucks. If I join the crowd I could die in the stampede before all of the crowd into the hell. I could be a loser but I would not be the member of the crowd in the market. I hate it! Today bargain hunters are selling since they predict after XAO back to 4000, the wind could turn to against them in rage. They worry about their pennies after they risk the dollars. They may be right for their circle but in my circle I could not do so at least before I come back to their circle.
Questions around micro economics I just could raise three questions to sort out my mind at moment a> What's probability for ARH to get the bound MOU? 85% in my feeling. See below for more b> Could it get the IO at reasonable costs? 98% in my feeling based on my reading c> What's strategic meaning for ARH to access the IO without Clive's HK listing? I think it is a compromising way to dig out the IO and ship it out to the customers. It could try to list later in HK even it means more expensive to get the capital! Business is always to get the best and comprise for reality! ARH has the issues to realize its underpriced value by putting the IO on the ships. MCC would like to take the project all and built the mining. "Final details are being worked out between the companies in order to finalize a binding agreement," was said, which should be and have to do without matter how quick the day traders hope good news come out everyday. Do you want to bet for the reward and accept the necessary waiting? Want to buy when Wall Street full of bloods? You need the gut to go out in the pitch dark night! Want to sell when tax drivers cheer for market, you need the cool mind! Want to underpriced asset is sold at the value you believe, you need to be patient and let the good things grow out of the wall for public! How to keep your mind not too hot or too cold? It is your own problem! I will bet on it since in this pitch dark market night, it is extremely hard to push price up 100% more or less. This news would be worth much more in the sunny days. My roughly checking confirmed it was a excellent news. However I would adjust myself based on my direct goals and indirect goals to service the warriors. *** MCC is named to be the project constructor, China Bank would provide loan, but what should we know first: To get the answers, a key term in ARH announcement needs us to get a clear definition, that is "fixed price lump sum turnkey basis!" 1. fixed price: if it is reasonable, it will make the project cost in fully control and would not shoot up as we saw from the project of MMX. 2. A lump sum is a single payment of money for a project, as opposed to a series of payments made over time 3. A turn-key or a turn-key project: it is a type of project that is constructed by a developer and sold or turned over to a buyer in a ready-to-use condition. Could MCC send its own workers here rather than hire from local? It would be very critical and would set up the bases for everything. If OK, the base line costs would be OK even we could not expect the deal would be lower than the international standard. It is the lowest option to get the money from the investors. To Clive and its high level management team should think about to use the debt for the project for long time. If we put MCC did involve with the failed HK list deeply, the cost should be not a problem. It seems not realistic to try another HK list again and it is not option to delay a project which have been got main approvals from government. *** MCC HK has agreed to assist IM to raise 75% of the project costs by way of export credit from Chinese banks. If MCC and IM both happen about the project fixed cost, the export credit form Chinese banks should not be problem since MCC is a companies of central government in China. *** 144-A/ Regulation S to support the development of the 500million high yielding notes from Royal Bank of Scotland. 1. The notes only to qualified institutional buyers as defined in Rule 144A under the Securities Act 2. Rule 144A requires pursuant to exemptions from registration provided under the Securities Act and outside the United States in accordance with Regulation S under the Securities Act, or Regulation S. 3. So Mineralogy/ARX needs to be pursuant for this exemption I could not see any problems to issue these notes, high yielding with high security of a project backed up by Chinese Bank, MMC, Clive, and billionT IO in Pilbara. *** USD $600 million investment in the project through offtake agreement Offtake Agreement: An agreement between a producer of a resource and a buyer of a resource to purchase/sell portions of the producer's future production. An offtake agreement is normally negotiated prior to the construction of a facility such as a mine in order to secure a market for the future output of the facility. If lenders can see the company will have a purchaser of its production, it makes it easier to obtain financing to construct a facility If the price of the project is acceptable for both of MCC and IM, it should not have problems to get some offtake selling.
What this market acts as? Valuations are very extreme in depression and euphoria Now fixed income is expensive. Stocks are cheap. This is no time to get out of stocks because of that. Long-term investors should focus on large-cap growth and tech stocks Short-term investors should take a slightly different approach In the short term, it is better to be more balanced and very diversified, but don’t get into cash by selling all you have, even you could rebalance portfolio. Cash is paying you nothing, and remember, valuations are very extreme here. So all we need is an absence of really bad news for the market to move higher. What is the good news. EU would not drag the financial system onto ground as GFC did. *** All of price down since April mainly are the external matters, such as the uncertainties from Japan Earth Quake and Tsunami, tax deduction - rebalance the balancesheet to cut off the ugly down, US default drama, EU debt crisis, and China slowing down. The worry mainly is on the fate of the global financial system. No one in XAO believes decoupling anymore even the global economy structure shifting continues. Someone said the crowd never is right at the panic and euphoric times. Someone said this time is different. The market is extremely choppy and more than anytime in IT bust. Someone believe GFC and debt crises are the extension of IT bust but no audiences exist. XAO worked most hard in the advanced market this time. It rushed to the GFCII and the shorters in XAO are sharpening their knifes and guns to shoot if Greece is in default. The longers at the sideline are waiting for the triggers to shoot too if no default in debt nations in the time they expect. *** Someone said the economic conditions have not changed as much as people think, and after the coming October, it would be obvious since the market should not go up and drop down 2-5% every day for more than 6 months in XAO and 3 months in DOW. Crash should be a matter such as "bang" down to cliff and over. If EU politicians didn't mess their home and make everything is not certain, XAO has no chances to swing for 6 months. Two or three more weeks would settle down everything in XAO. Gold is a typical "speculative asset" so that a lot of worried warriors get the chances to develop their biases on gold. 1. Someones believe a gold bar in the backyard would make their life and living standard, which is impossible. 2. Someones believe gold has no value, which is ridiculous words. 3. No one speculates bullsh*t in this modern market. 4. Biases make idiots in the market. So check whom you are and then talk about gold. If you are a speculator, you can play gold for your living in the case you know when to buy, run away, unfold, and hold. If you are a traders or some types of investors, you could buy some gold or gold hopeful for insurance. I am not a speculator but I do feel it could be much brighter than now. When all of the market love the cash, gold should be down. 1. For short time, you need the cash and you have to sell some winners to get the cash since you have lost too much in your losers. 2. In long term such as two years, debt crises would haunt in EU and US where people spent too much. 2.1> If you own the money to others and you have the capacity to pay as gentlemen, you would pay. 2.2> Politicians could cheat but they want their voters believe they are not bad boys. In the worst they could use holy wars to gloss over their cheating. They have not gone so far. 2.3> They don't have too much options without the war. They have to think to balance among the investment, saving, growth, and survival. 3. Something in surprise could drive gold to the level we could calculate. You should believe it if you are shocked by the bigger and bigger swings since April However all of surprises mean abnormality and should regress to the means in normal time. *** In the time as it is, it's really, really tough for warriors, big or small, to make sense of it, so you just have to make sense of what you know. To break down the crow sentiment balance in this dark night, it needs some triggers to shock the warriors knee-jerk reaction again, It is their mental asylum(I have to say I unfortunately put myself into this asylum due to my ignorance, arrogance, and stupidity, even I have tried very hard to shock me up for normal in the last a few months). It is a game about confidence. No significant confidence swing, XAO would jump over the fence, 4000. Around this number, more and more day-type bargain hunters would leave behind to see the train leave away or be pushed into the hell until they figure out what happen to them. I choose to be in the hell or take the train to leave away from this bloody slaughter table forever. 1. Partly I bet on the lucks, 2. partly I bet on the belief about the sky, 3. partly I bet on since I believe EU could not drag China and Asia down into the hell, so that this lovely land, Australia, 4. partly I bet on once EU and Greece could not scare XAO wants to put itself into the toilet, the value would be recognized by the Australians and the international investors 5. partly I bet... 6. if all reasons to bet don't work, I would take the spade. Quite likely I just pick up the spade and leave the chipd in this slaughter table and come back after XAO back to 5000. I would not worry and right up in the nights for nothing in my mind updating or feel angry since no one think the future as me. Do you see any commanders for big wars who just leave the judgment and decision to the warriors collectively and he find a hole to see the sky for the floating worries or protect his ideas aggressively and provokingly for better feeling? It is a shameful life! Much more shameful than you are defeated for a while due to human errors. Am I conscious now? I ask myself again, again, again... I am inverting, inverting, and inverting from the boom to the bust and from bust to the boom in order I could not be ignorant, arrogant, stupid, and harmful by cutting my own into pieces financially! It is a market so reactive to news that few have seen before. One day it's Armageddon, and we're going into a hell. The next day, people find the sky is still there. *** If you could find your own mind, it is your luck in this market and you could get a lot of lessons about the crazy human kind and it will feed your mind with the wisdom and intelligence in future. Don't waste your lost shirts! The bottom line is you could make your English in social term better as those in your fields if you were not born here.
EURO: Enjoy to be attacked? Even not all could understand why XAO rush harder than EURO to crash all know it is because EURO crises and the caused fears in XAO give the chances for the shorters to short XAO so bravely. All of people around the world call XAO as risk market in the risk economy with the risk asset. Yes with the coward crowd with the worst confidence would result in worse than any expected worst cases. When the heavy bearish tides one after another, XAO has to stand at the edge of the cliff and would jump down if it feels EURO would be down. However the tide would concede or retreat. After that the worst has to swing back to normal and risky assets would become the best assets. Why is XAO so fearful? Why didn't most warriors of XAO like to beat themselves? It seems better to see what EU crises become a matter to drag everything down. *** EURO has the worst politician with the most loose structure to deal with any crises. Within this political and economic system, when EURO faces the risk to collapse, their politicians are just dishing up more bad policies and missed the opportunities to stem the crises. On one side, Europe's situation is really, really scary. 1. It has the countries that account for a third of the euro area's economy which are under the speculative attack by the wild market forces. 2. Less and less people believe the single currency could exist 3. More and more people believe and are convinced a collapse EURO could inflict vast damage on the world. When the people believe something and they could not control, the fear is magnified in a self-reinforcing and the economies would be self-destructive. They help each other and then make the domino cards of individual worst cases become a bigger and bigger snowball. Without enough shocks and right and powerful policies, it would continue to make bigger snowball. *** On the other side, the politicians seem not know it is confidence crises. They prefer to worry the opinions of the voters since these voters would decide their political life. They look around not to stop the crises and the dropping in confidence, but what is the populism and what have got popular. They carefully have being found some ways to provide more credit to countries in trouble, which should work in normal time but never work in the crises. The crises need the insight, courage, creative capability to lead the crowd skillfully, and then use some heavy doses of medicine to save the sick EURO. However so far these modern politicians in EURO have shown they don't have the capability to deal with the crises. They failed one after another policies, made the situation worse, asked debt reduction but failed to realized its need to stem the crises and then they have chances to get debt reduce with economies development. *** The bad news and bad consequences would attract more and more attacks from the wild speculative market. The fear and panic spread around the world in light speed. XAO has been venerable time. The flood, Japan reactors, the fear of the tipping off china, have worried all under a minor government. Once XAO realized the risk of EURO, it started its own self-reinforcing to short down. Overloaded worry result in despondency and new bad news would greatly be exaggerated and give more range for the shorters to short and more margin to cover. It is common percepts that XAO must be under 4000. The problem is the politicians here could not do too much. The economy here has been in nearly full capacity. RBA is in paradox: still hot old economies, high house price which could be bubbled soon and burst into pieces, high pressure from the potential inflation. The keys for Aussie problems are not in Aussies' hands. That is terrified but cheerful for the cruel shorters. What if China would not tip off but EURO in fault or China would not tip off and EURO not in default? When the politicians could not do good things wild market would play its deflation part to short the stock market down so that to hit the confidence to force the economies cool down or until politicians have to act since the economies down too much! *** The keys are in the hands of EU's politicians and US's congress but this time is really different. No one seem at all ready to acknowledge a crucial fact. So we had US default drama and Fed was warned by US congress to support the economies with more print money. The fact is without more expansionary fiscal and monetary policies in Europe's stronger economies all of their rescue attempts will fail. If US could not hire more its economy could not come back to normal. We could have GFCII. Fortunately US seems have done not too bad. Market expects the more money into the economies but not be very disappointed. However the story so far in EURO is different: 1. The euro made in 1999 led to a vast boom in lending to Europe's peripheral economies 2. It was because investors believed (wrongly) that the shared currency made Greek or Spanish debt just as safe as German debt. The wild market would do the stupid things time by time too. 3. The lending boom wasn't mostly financing profligate government spending but boomed the private debts and spending, especially in houses. 4. Spain and Ireland actually ran budget surpluses on the eve of the crisis and had low levels of debt. The house bubbles as any bubbles would cost too much. Aussie politicians especially the independent RBA worries the bubbles ****** in the resource booming very much. Booming always comes with over-spending and low economics. How to let the booming in the scope of the economy capacity? Ridiculously good economies make its enemies and make all of Aussies started to worry and the stock market is the leader. You could not disagree why so many people worry the houses in Australia but you could not say our houses have been the bubble which has to burst into pieces under the tough rate policy of RAB and high Aussie dollars. Business and families here have more saving and have been in leverage for years after the GFC. If EURO worse we would be hurt more but should not be worse than GFCI. I feel it should be much better and we seem have more chance to deflate the house bubble elements in order!
Put EURO and XAO under the microscope All of lending boom has to stop and often than not stop abruptly. When the lending boom in EU abruptly ended in GFC, an economic and a fiscal crisis were just unavoidable: 1. Savage recessions drove down tax receipts 2. Great reduced tax incomes pushed the budgets deep into the red 3. The cost of bank bailouts led to a sudden increase in public debt. GFC has hit the confidence too much. The wore public debt caused a collapse of market confidence to the bonds of the nations with the weak economies. Could you see the self-reinforcing of the confidence and economy fundamental? One egg gives a birth of a chicken, one chicken makes more eggs... I just could not figure out, before I think about the self-reinforcing and the incapability of EU politicians and the paradox of Aussie policy makers, why the market turbulence have last for so long after XAO led the world into the GFCII with so high confidence at the beginning of August 2011. Now I seem get the sense why! I read all of books from George Soros but I never get so deep understanding about the reflexivity and the sefl-reinforcing relationship of the market sentiment, fundamentals, and market value and price. *** What EURO politicians did so far? 1. EURO demands harsh fiscal austerity, especially sharp cuts in public spending 2. EURO hopes to provide stopgap financing until private investor confidence returns. It is a sure thing that they would not work in Greece: 1. Greece actually was fiscally profligate during the good years, 2. It owes more than it can plausibly repay. It could not work for Ireland and Portugal too. It is because the heavy debt burdens with the reasons different from the Greece. However it is said EURO zone as a whole has a favorable external environment 1. Specifically, a strong overall European economy with moderate inflation 2. Spain even now has relatively low debt 3. Italy has a high level of debt but surprisingly small deficits All seem not too bad but why confidence could be so bad and XAO could be up right in the night for its future? What is the percentage of Greece, Ireland, and Portugal in EURO and global economies? The virus has been greatly leveraged for its effects. Who do the leverage? *** It is EURO's policymakers who could not understand the self-destructive and self-reinforcing environment. They could not understand a collapsed PGIIS would damage all of the good or bad economies in EURO and extreme bad confidence could stampede all down. EURO seems like to deny the environment the debtor nations need to get the economy better while the debt could be reduced. 1. The private demand in the debtor countries has plunged with the end of the debt-financed boom. 2. The public-sector spending is also being sharply reduced by austerity programs. 3. To reduce the debt, the debtor nations need to create jobs and growth and no jobs and growth how to reduce the debt and make society stable? 4. Debtor nations have to export for the jobs and growth. 5. But if all in austerity who could buy things from import? 6. EURO in the all austerity has only one way - quickly goes into recession. *** The challenges seem not too big except the mental challenge to the policy makers who sticks to some dogma: 1. The debtor nations need to cut prices and costs to export 2. Strong economies just need to tolerate 3 or 4 per cent inflation, which is necessary to allow the debtor nation to gain ground simply by having low or zero inflation. 3. It is the requirement to get out of the darkness in order and could be done The problem is EURO policy makers have a deflationary bias: 1. It made a terrible mistake by raising interest rates in 2008 just as the financial crisis was gathering strength 2. EURO policy makers have learned nothing by repeating that mistake this year. So that EURO has been in this debt crises 3. It is not home crises but makes XAO crazy and all crazy globally! It sounds ridiculous that: 1. Germany has about 1 per cent inflation rate over the next five years 2. It implies significant deflation would be in the debtor nations. 3. Debtor nations will deepen their slumps and increase the real burden of the debts, more or less ensuring that all rescue efforts will fail if some dramatic policy changes. Germany works hard and like to live under the means. If it lives by itself you should admire it. But as the main economy in EURO and what it did would harm all include itself in the structure of EURO. You want to have a peaceful and strong EURO and then you have to work hard to stimulate the economy in EU as a whole. The problem is that Germany is not ready and reluctant to act to save the confidence. So EURO gone or Germany does its duty and responsibility for EURO debt crises stop and get the confidence back! Time ticks up and crises has been so worse to a trigger point for GFCII. It is fearful really! However in the sense GFCII, other part of global economies seems need to do something to cool the hysteria of panic down. It is a game for market players to use the environment for profit. Hope we could do so. We could not control the politicians but we should put more buffer for our safety. *** Germany seems love the hard-money-and-austerity dogma. It has the historical root: German had very inflation in the early 1920s after over-expended public spending to get out of the devastate economies. The over spending resulted in high inflation and new economy crisis. However Germany has different economic and political situation from that in 1920. In hinder sight, economists believe the policies of Heinrich Bruening, from 1930 to 1932, made the Germany's economy worse than the time of Great Depression by 1. It insisted on balancing budgets and preserving the gold standard 2. It cut off the money supplies when the economies need the money to create the job and growth when everything was depressed. The monetary and fiscal policies have to be changed and made based on the economy situation. It is the same a market player has to decide when to buy, sell, and hold for best outcome. Don't try to criticize the policy makers since I am not qualified. Do hope I could get better understanding about the macro economies so that I could be a value market player with wise speculative skills by which I could identify the worst and best time for my business profit. *** Hope Euro could stop its crises or default Greece very soon! The financial system would be hit terribly at least for short term. But it would make the market players certain what would be on the table. Actually now all just work for the worst and have no ideas what the worst could be. If the worst really comes in, all of the policy makers could make some resolution such as cutting the interest here and spend more to boost the local and global confidence in the ruins. It is a blunt knife which is cutting the throats of the bargain hunters in this contrition war and no one is winner. The longer the uncertainty the more crazy XAO would be! When people make guess for worst they would do all for hell. http://www.history.ucsb.edu/faculty/marcuse/classes/33d/projects/1920s/Econ20s.htm
Why so many people run in stampede? We have problems in all of systems, markets and societies. In normal times all of the problems could be digested or fixed effortlessly or legally by public, such as a babies doesn't sleep in the nights or some one kill 10 or 20 people. However in social and financial crisis, some little thing or things all just worry about, could set fire and signal hysteric reaction. One of reasons I made a series of mistakes is I ignored the development what happened in EU debt crises and the reactions of the people which could be in some very bad situation. I need to see the possible scenarios better if Greece is in default since Germany just doesn't want to put more money in or whatever the reasons. Why do we worry about Greece default so much? It is a sure answer that all sorts of problems in our global financial system would start cropping up. This global financial system has linked the global so tightly and you could not decouple the bad things in box. Once the bad things start its domino effect, its power could crush all in the case no ones could have enough power to stop the contagion. It is not about Greece and PGIIS but about the uncertainty that the financial system would be damaged greatly or little bit or certainty that if not stop on time it could cause the money circulation slow down around the world. If your brother own you $10,000 and you just used up all you have, at the same time your brother just bankrupts; both of you could not get any money from anywhere, what would happen. If too many of us are put into this simple situation and we all are dependent each other, it is a sure chaos would be there. Where will it stop? The wild market would run and never think how to stop the chaos until all could not run any inch. It is a time the policy makers have to fight against the wild market. It is stupid to leave the worst matters to the wild and let the wild fire burn all down rather than just the things we want they gone. However it is what seemingly EURO policy makers didn't want or could not limited by EU fatal structural faults at least so far. *** All of the world hope EU could have the guns with full of explosive for worst situation that is if all of PIIGS are default. 1. EU would need more capital because of the roughly €100 billion in collateral in Greek paper it holds, not to mention the roughly €30 billion it’s purchased on the secondary market. 2. Its member countries would have to make good on the guarantees they have already made for the facility. 3. In both cases, Germany foots 27% of the bill. In good time few think about worst cases and in bad time all think about worst cases. If you don't have buffers for the worst cases, people just don't want to risk if the payment for the risk is not high enough. It would mean high cost for debt, which could put the debtor nations without any money to service the short term debts. All would contribute the bad sentiment, which would make the more and more people use up their money and then more panic to trigger the more serious crises. The wild market would move it quickly to its worst position if could image. In the jumping down cliff, the private-sector banks would be exposed to the risks, which is huge and unbelievable in normal time. They usually espouse the grand risk in two ways: 1. If they own Greek government debt directly, it usually would have underwritten protection on credit-defual swaps. 2. Even if an institution bought protection on Greek bonds, no one could be sure the counterparty could afford to pay out. The credit-default would compound the exposure issue. It would be the presence on the wrong side of a CDS or Greek bond trade of a bank’s hedge-fund clients. It could be disastrous for them. So suddenly all of public finance houses become risk sectors in strong nations such as Germany or weak ones. All of the people around world know the bad news in light speed and then all started at the same time to run, which would result in stampede before real damage happen at least. The confidence of the world is at the dangerous level now. The global economy seems hang over the door over the heel by a thin hair! People could not see bright ahead and in the rear mirror most of people just could see the GFC tight coupling to fall down from cliff. What could you expect them do? All seem know it is bad and extremely bad since you couldn't hear anything good! Be alive or die? Run first!
Main Street seems not very worry for its graves! If you want to know how dangerous of the global financial system you have to know LIBOR. What Does London Interbank Offered Rate - LIBOR Mean? An interest rate at which banks can borrow funds, in marketable size, from other banks in the London interbank market. The LIBOR is fixed on a daily basis by the British Bankers' Association. The LIBOR is derived from a filtered average of the world's most creditworthy banks' interbank deposit rates for larger loans with maturities between overnight and one full year. Do you lend huge money for 5% interest to your neighbors if you worry they could not pay the primary back? The advanced global financial system would be in great trouble or collapse depending on how banks could be trusted each other. Few bank would hoard huge cash before realizing the risks for their capital since the modern education system doesn't train the people for abnormal even we have a lot of people learn the risk management but they usually don't question the basic in good time and then in bad time the losses become so large and no risk protection effective at all. Could we see the risk before these big boys lose tons and tons of money and have no cash in hands? The virtual few risks such as GFC are looking-improbable and high consequent. Who run in it would be stamped to die or nearly die. And usually once it happens, run is too late and much dangerous without carefully thinking. Could we get GFCII very soon? It seems main street around the world doesn't agree what XAO and all of the stock markets around the world have been convinced that the financial system would crash as GFC and all of us would buy the potato with the gold. *** You could say Main Street is wrong in future but it seems true XAO and its siblings have actuated the possible mistakes of Main Street into the price. In euphoria time I don't trust Main and Wall Streets but now I do feel XAO is crazy! I do feel Mr Market is playing a trick and make the turbulence unreasonable longer so that the contrition war could consume the bloods and bones of the toughest retail bargain hunters who are the residual of the trading generation born in IT booming. Wild market would try all to get all of gamblers, who simply just believe "buy and hold," "stop loss," and "all in the patterns," wiped out! Otherwise my stupid mind could not figure out why Mr Market just introduced IT bust, GFC, and EURO deficit in a short time of its history, a decade? All of us could not afford the losses for a few years let alone a decade or a few decades. I believe the trading generations started from IT booming have got into their graves financially and few would not work in the offices and workshops until they say bye bye to the lovely or terrible human world! *** Of course new generations would think how to trade for quick money and they could have more powerful systems. Among them some high IQ boys or girls would want to learn more about trading before they could understand life logic and common sense onto the earth.Once some lucky monkey get the holy grail for a year, all of the new generation for trading would be crazy again. How about the IT generation? A lot of them would get the logic and sense but they just could not afford to play in the market anymore. Some of them would tell people how they could cleverly use patterns and systems but never dare to put the money into the market. It will let them feel better after losing the shirts without any risks for them to lose the shirts. Some would be wiser and prepare to write books about trading when the new generation become crazy for their own retirement! Do wonder why Warren Buffett doesn't write books? Do wonder why George Soros wrote the books about market as he would have written for a complicated open control systems and put too much words how bad the system is? Why don't they write for "Stop losses" but "no losses?" Why don't they write patterns of the price but theory of bubble bursting and reflexivity? It will repeat in generations until we come back to the wild world for potato only! *** Don't put your toes at very beginning onto the road for Mr Market's slaughter table! It is really craps since few would like logic and senses than the thrilling and exciting when they are young! The only useful part of the crap is you could change before you take the road. If you start a wrong journey in the road to the slaughter table, the more passions and your excellent IQ you put on, the more unaffordable risky you would take. If you are not the most lucky monkeys among the busy crowd, you would be one of the IT trading losing generation II. Too many clever traders are poorer than some wise plumbers who have the reasonable IQ but may not be capable enough to understand your systems. But if it is your selection such as me, it is fine and you can enjoy the rollers-coasters very much! I can fix its problem, young man said! But most of us really don't know what it is except the thrilling and exciting for our dream until too late or too stubbornly think we know it without second even we have lost shirts a few times in a decade. Think first and run second! It has not its own problems after acid tests for thousands of years. It is your problems which need to be fixed.
Some scenarios from Greece or EU All of market players may could not understand why Greece default is so critical for XAO, DOW, and all of indexes around the world but all roughly get the sense and assume now Greece = EU! So if Greece crashes onto the ground, EU would lay down on the ground too. It is baseline in white and black in the mental systems of all of the depressed market warriors. Greece uses EU, its long leverage to put the whole world into chaos or confidence crises. XAO believes that Greece could push EU down but what if EU really bursts into pieces? Could all nations in EU would struggle as Greece after EU gone? What if EU is there but Greece is wiped out from EU? All of these questions are too difficult to answer by the operators of trading systems, advanced or very primary! It may be helpful to see different prospects for EU since Greece is nothing if it could not turn to be virus in EU with the kind tolerance of EU lovers. *** EU should be reorganized as a independent nation that means its finance and economy could be run in a single rule and principle frame. But it is extremely difficult for the nations in EU to do so in the backdrops of culture and history. All want the benefit from the cooperation economically but don't want to pay the cost to clean up the roots in tight unity. EU has rules and mechanism to kick out its members. It could not make quick decision when the crises suddenly threat its survival. A worse problem is no one can leave away from EU legally. So the only way to quit is to exit the EU altogether. The market seems unable to accept it. Politically it seems going too far. So except worrying and beat itself, market could not do anything until a certain and significant solutions list above could be there. I just wonder why Britain, Norway and Sweden that could chose to be members of the 27-nation grouping but don’t use the euro as their currencies. It seems they are not the members of the national crowd. *** Yes, the consequences to the debtor nations, if EU gone, could be catastrophic: The national deficit would double, banks would collapse, and the countries would enter a recession period comparable to the one of a country in war. That scare all. So in short term EU gone seems not a option. But how could you sure the EU close door would not mean a new era. A lot of weak nations became default in history. XAO seemed never was beaten down to ground. Actually as our individuals if the nations could devalue their currency, be going to pay down the debt at a severely slow rate, they could recover by themselves. Still, the risk would be that citizens and companies would flock to non-euro-zone banks to keep the value of their savings. *** Good! Now I really get some senses and learn a lot for next GFC!
When do you most vulnerable? Since the crash after the beginning of August, the market becomes lower and lower in a unexpected but very turbulent time, the weak hands in the market become more and more. It is so vulnerable so that most of voices are risks, the crash, the tipping off, and anything people could image. All of XAO are insane and could beat themselves again. When do you most vulnerable? Why do you put yourselves among the every-increased depressed crowd? Why do you allow the market beat you again and again and toughest hands become the most vulnerable hands? The roof of your houses have been damaged by the fire but the storm just followed the fire. While you thought the storm should be gone and you could have breaks, some riots got together and rob the remaining potato and a few beefs for your survival. Why don't you put a fire alarm in your houses at very beginning? The fire is unpredictable but you should known once it happens thing could be worse. Since you are vulnerable and any little trouble you would never care about in the normal time, could push you into a situation to give up. Why don't put a thinker buffer between the roof and ceiling? Why don't store enough but diversified places for your potato? You may be matured and then you know you could blame anyone else. You know bad things could happen in strings. You know you need the margin for safety. You know you should be very prudent. More important thing is you know the market is a war place and everything could be worse than the expected worst case. You just could not forgive yourselves but you also know you could not just up right in the night to beat you to die. You don't want to act as the crowd any more but you have not got the prudence, optimism with the guard, heavy protection to go out for your service business. After so many disastrous things happen in the place where everyone stampedes for exit, you know it is the cheap ticket to the hell but you just as anyone else could not see the enough light ahead even you believe the clouds, the storm, the riots, and the lemmings to the cliff could stop in a second. You just don't know when it would happen. Worst case in image could be worse which needs the cash reserves for survival and grip on the opportunities with less and less risks. What basic logic could you learn? Could you forget the complicated system when you just need to know what you must do and prepare? We never have problems with profit if it is bigger enough. We would have unaffordable risks if our roof have got a few huge holes in fire even the raining is very light. Do you know that now? Could you remember that? Wise hands are those who could take the gold when all else are vulnerable. Could you timing it or identify it by value or by whatever you love? I am not depressed but I just could not let myself go and forget how insane I was in April. I do worry about if I let myself go too easy this time I would repeat my insanity when my head is hot and red hot again! Could you be sure you would never have a hot head? I don't dare to say so since my history tells me I became insane every a few years. I really feel sorry for myself!
Get the spades for my last defending line! Next week I will start to look for the spade for worst than the worst cases I could image. I don't want a tiny raining to go though my damaged roof to ruin everything in my corners. I have tried all to move the valuable things to the places have less probability to ruin by the raining since I don't want to sell on fire. I need to work as workers or whatever I could find which best to repair my roof. It is hard not to blame others. It is hard not to blame yourself if you are conscious and self-aware enough. It is hardest not to blame others and yourself but dance to work on your last defending line and prepare if the last line is broken you still could have chances to make tomorrow even it could be not comfortable and pleasant as we are in the party. If I could be much wiser due to the bloods and the crash, it could be my luck for my future to service the warriors better and get my own self-reliance. I could not predict XAO's insanity but I could change myself. I know if I run in the stampede I may have a chances better even the chances is very little since the experience tells me the most effective wealth destroying is the sale on fire. I could not run in the ruins without matter what would come in. If I run this time I would take part in the party and run in the crash and ruins again! I don't really want the pains but I do need to stay where I stay to see how cruel of the stampede and let the lessons into my blood and bone. With my spades I could see how the tiny and last few raining leverage its power by the crowd depression which I know for long time but never get chances to feel and experience. I admit I put my toes in this crashing road; I deserved to see the roof with the holes and felt painful; I still believe all of my fishes are under-priced; I could not tell how long XAO would be in depression; I do hope it could not last for 2 years, 5 years, or a decade but I have to prepare for it! Without you want to buy and hold or not, if you believe the price of the market as a whole is too cheap you have to get the capability to wait!
Do you know you are a fool? Yes, I do and believe it more than any time I have got in the market. However I felt I was not after most of the market lost the shirts in GFC and most of retail warriors let the V-Shape up train left them in the bloods and ruins. Since October 2010 until this April I worked very hard to let me believe I was different from any fools. Human never could fly if he doesn't know the fact he could not fly with its inherent gifts. Could we find our own limitation and use our inherent gifts, thinking, to find the chances, with the risks we would like to take? Market is a war place but we have to know we were born to be consumed if we come into the war place. How could we not be consumed first? In our own fields in the offices and workshops, we know we have to do our jobs very clearly. But in the market nearly all of us start with the dreams: huge money but less risks, little work and no challenge, gold coming with our clever minds since we are not fools. However in any war, capability for drilling a normal holes, wisdom to have a last defending line which never could be broken, survival capability, and patience to wait for your turn(timing or not timing) are all needed for the winners of the last victories. My weakness is hot mind when the market is hot. My weakness is when huge risks loom I tend to resist with all I have not what I should have and make somewhere far away from this war place. You don't need to surrender completely and put you onto the slaughter table so that Mr. Market could cut you at his will. I could be a flexible and get the result better and even surprise myself. In the darkness we tend to predict worse consequence in future as facts but it is wrong. In darkness we tend to run away without thinking how to build our last defending line, which is wrong too. With my spades I could see how the tiny and last few raining leverage its power by the crowd depression which I know for long time but never get chances to feel and experience. I admit I put my toes in this crashing road; I deserved to see the roof with the holes and felt painful; I still believe all of my fishes are under-priced; I could not tell how long XAO would be in depression; I do hope it could not last for 2 years, 5 years, or a decade but I have to prepare for it! Without matter you want to buy and hold or not, if you believe the price of the market as a whole is too cheap you have to get the capability to wait! I need the spades to increase my cash reserve rather than to see it dips to zero when the attrition war move on and on! Would you throw your spade again very soon? It would not depend on me but what the market works. We should try to predict the future of the business in normal time when it is abnormal but it is bad to predict the future of human kind or the war in global scale.
