Where the DOW goes, so goes the ALL ORDS!

If the DOW goes down 50% again, where do you see the ALL ORDS and why?

The DOW and the ALL ORDS are quite disconnected.
We are more tied to China and India.

Depends on who wins the election, that'll have an influence on the all ords
This is not my usual parochrial opinion, this is just plain business facts.

Sprintcyclist wrote on Aug 18^th, 2010 at 12:18am:

The DOW and the ALL ORDS are quite disconnected. We are more tied to China and India. Depends on who wins the election, that'll have an influence on the all ords This is not my usual parochrial opinion, this is just plain business facts.

As I have said previously, governments can have an effect on the Economy, but only at the margins, they can not swim against the flow of the mainstream Economic drivers and that applies equally IN OZ, to either or both major political party's, as it does to the USA or any other country.

Two things of interest that go to the likely future directions, here in OZ & Globally -

1) There is a very apparent linkage between the performance of the  USA DOW & the OZ ALL ORDS -
http://www.shareswatch.com.au/blog/wp-content/gallery/charts/xao-vs-djia-3-year-chart-mar-10.gif
http://www.shareswatch.com.au/blog/stockmarket/the-asx-all-ords-the-dow-jones-and-other-charts-to-watch/

Being the above linkage in mind and that I expect a significant decline in US markets & Global before the end of this year, it is safe to say that the OZ share market will also take a similar & sizeable hit.

But, this time, the mainstreet OZ Real Economy will also take a sizeable hit, irrespective of which party "wins" or should that be "loses" this election.

2) Whilst the USA is shrinking somewhat, in terms of their comparison to some of the up & comers, such as China & India, they (the USA) are still a huge player on the Global Economic scene, as is demonstrated by the following list, in the CIA World Fact book.
https://www.cia.gov/library/publications/the-world-factbook/rankorder/2001rank.html

1 European Union $ 14,510,000,000,000 2009 est.  

2 United States $ 14,260,000,000,000 2009 est.  

3 China $ 8,789,000,000,000 2009 est.  

4 Japan $ 4,137,000,000,000 2009 est.  

5 India $ 3,560,000,000,000 2009 est.  

6 Germany $ 2,811,000,000,000 2009 est.  

7 United Kingdom $ 2,149,000,000,000 2009 est.  

8 Russia $ 2,116,000,000,000 2009 est.  

9 France $ 2,110,000,000,000 2009 est.  

10 Brazil $ 2,025,000,000,000 2009 est.  

Whilst the EU is listed as number 1, clearly they are not one cohesive force, as is the USA and it takes the next 3 largest countries put together, to be a large as the US GDP.

In short, the USA is and will remain, for some time, a major force in not only Global Economics, but also as a Global Military force.

The Big Interview With David Rosenberg

Below is a very good and nearly unfiltered 30-minute session with David Rosenberg of Gluskin Sheff. He speaks with the Wall Street Journal’s Kelly Evans in the weekly "Big Interview" feature, a format I really like. I have featured Stephen Roach and Sheila Bair at CW from previous big interviews.

Rosenberg has been one of the more prescient economists regarding the contours of the particular business cycle and their causes. His overarching theme expressed in the interview is that we are at or near the end of a super credit cycle that makes this downturn unique in post-World War II history. This means we are in the throes of a secular private sector deleveraging which will crimp growth for some time to come.

In Rosenberg’s view (and mine), the pace of this particular cyclical upturn has been unsustainable from the beginning because all of it has been predicated on the inventory cycle and stimulus. I first pointed to this in May of 2009. Late in 2009, I noted a Paul Krugman piece which demonstrated that the way the stimulus is being applied necessarily meant lower GDP growth in the second half of this year. I think fiscal stimulus is dead for the reasons I first gave in January 2009 – one reason the focus now seems increasingly on the Federal Reserve. Can this recovery be sustained without more stimulus? Given the jobs picture, it is doubtful. Rosenberg believes Q4 could see a decline in GDP.

Here’s Rosenberg. (P.S. he calls 9,000 on the Dow, 2% on the 10-year and 11% unemployment in a year’s time.)

Video follows (on Link) -
http://seekingalpha.com/article/220824-the-big-interview-with-david-rosenberg?source=email
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David Rosenberg, an Economist, is one (economist) worth a listen, he has some realistic comments.

PS - His expectation is a 15-20% decline in the DOW, with around 9,000 in 12 months from now.

Another significant drop.

http://www.news.com.au/business/breaking-news/dollar-lower-after-awful-us-data/story-e6frfkur-1225907601544

Terrible source to get the story from, but hey! I'm busy.

Ex Dame Pansi wrote on Aug 20^th, 2010 at 8:57am:

Another significant drop. http://www.news.com.au/business/breaking-news/dollar-lower-after-awful-us-data/story-e6frfkur-1225907601544 Terrible source to get the story from, but hey! I'm busy.

Pansi,
I understand the source of your comment (News Ltd), but as usual it's the factual content of the message that is important!
===============

Dollar lower after 'awful' US data

THE dollar opened lower after poor US data sparked fears a double dip recession is imminent.

"There are double dip recession fears in the US after some pretty awful data. Commodity markets fell and equity markets fell.

"That's knocking the wind what of the Aussie, the kiwi the euro."

During the offshore session the US Labour Department said the number of Americans filing new weekly claims for jobless benefits jumped unexpectedly to 500,000, the highest level in nine months.

The Labour Department said jobless benefit claims in the week to August 14 increased by 12,000 from the previous week's revised figure of 488,000.

Also during the session the Philadelphia Federal Reserve said its index of current activity declined for the first time since July 2009.

The index fell to -7.7 from a reading of 5.1 in July.

The Dow Jones industrial average dropped 1.39 per cent to 10,271.21 points, while the Standard & Poor's 500 Index fell 1.69 per cent to 1075.63 for its lowest close since July 21.

During today's local session, Reserve Bank of Australia deputy governor Ric Battellino is to give a speech to the Moreton Bay Better Business Luncheon in Queensland, entitled Twenty Years of Economic Growth, at 12.50pm.
Link -
http://www.news.com.au/business/breaking-news/dollar-lower-after-awful-us-data/story-e6frfkur-1225907601544
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I agree that Global markets are again slowing, as the various Economic stimulus packages start to wear off.

Btw, I note that they refer to this Unemployment increase as being "unexpected", when that is far from being accurate, as the temporary US Census employment was always "expected" to wear off!

Regrettably we (the rest of the world) will not have the same leeway that the Japanese have had over the last 20 years, in their fight to stave off the effects of a De-flating Economy.

I note there is a reference to the RBA deputy govenor giving a speech entitled "Twenty Years of Economic Growth". That will obviously refer to the past 20 years, because the next 20 years will not be about growth!