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The Risky Toronto Stock Exchange Is Now Scarier Than Ever!!!

 
Luisport

User ID: 17408962
Portugal
06/05/2012 08:56 AM

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The Risky Toronto Stock Exchange Is Now Scarier Than Ever!!!
The Risky Toronto Stock Exchange Is Now Scarier Than Ever

...Banks in trouble is the first part of the iceberg about to hit Canada.

The second part of the iceberg is the coming (if not already happening) bursting of the commodities bubble. So much of Canada’s recent good fortunes can be traced back to soaring prices for oil, metals and agricultural commodities. That will come to a very painful end.

If you believe Wall Street, and you really should not, commodities are sky-high because of the insatiable appetite for resources by China and India and whichever other countries a clever analyst can throw into an acronym.

In reality, commodities have soared because the relatively small resource markets, by the standards of global finance, have been deluged by a mountain of money looking for the next big thing. Hedge funds, pension funds, sovereign wealth funds, to name some of the players, have poured enough money into commodities that the true, real-world fundamentals have ceased to dictate price.

Many of the bullish bets on resources are indeed predicated on the “story” of an ever-growing China. And the problem is, that story is coming unglued. China is slowing dramatically, as an excellent recent article from the Atlantic pointed out.

Preoccupied by the goings-on in Europe, China is sure to come back on investors’ radars. And when it does, it wouldn’t be surprising if the recent weakness in commodities turns into an all-out rout.

Which means that energy and mining stocks are likely to be decimated. (Gold is not a pure commodity like the others, so I do put that in its own category). By the way, a commodities implosion will also hurt the capital markets divisions of the banks. It’s all so interconnected.

When the tech bubble burst in 2000, Canada suffered, because Nortel (and others) had such a big influence on the index. But fortuitously, a generational commodity boom started that would more than compensate.

Now, there is no obvious next bubble to save the day. If housing and commodities do what I expect, the TSX is in for the mother of all bear markets.

At least we can all still buy doughnuts at Tim Hortons.


Read more: [link to www.businessinsider.com]
Luisport (OP)

User ID: 17408962
Portugal
06/05/2012 08:58 AM

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Re: The Risky Toronto Stock Exchange Is Now Scarier Than Ever!!!
burnit
Anonymous Coward
User ID: 17415473
Kenya
06/05/2012 09:00 AM
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Re: The Risky Toronto Stock Exchange Is Now Scarier Than Ever!!!
The Risky Toronto Stock Exchange Is Now Scarier Than Ever

...Banks in trouble is the first part of the iceberg about to hit Canada.

The second part of the iceberg is the coming (if not already happening) bursting of the commodities bubble. So much of Canada’s recent good fortunes can be traced back to soaring prices for oil, metals and agricultural commodities. That will come to a very painful end.

If you believe Wall Street, and you really should not, commodities are sky-high because of the insatiable appetite for resources by China and India and whichever other countries a clever analyst can throw into an acronym.

In reality, commodities have soared because the relatively small resource markets, by the standards of global finance, have been deluged by a mountain of money looking for the next big thing. Hedge funds, pension funds, sovereign wealth funds, to name some of the players, have poured enough money into commodities that the true, real-world fundamentals have ceased to dictate price.

Many of the bullish bets on resources are indeed predicated on the “story” of an ever-growing China. And the problem is, that story is coming unglued. China is slowing dramatically, as an excellent recent article from the Atlantic pointed out.

Preoccupied by the goings-on in Europe, China is sure to come back on investors’ radars. And when it does, it wouldn’t be surprising if the recent weakness in commodities turns into an all-out rout.

Which means that energy and mining stocks are likely to be decimated. (Gold is not a pure commodity like the others, so I do put that in its own category). By the way, a commodities implosion will also hurt the capital markets divisions of the banks. It’s all so interconnected.

When the tech bubble burst in 2000, Canada suffered, because Nortel (and others) had such a big influence on the index. But fortuitously, a generational commodity boom started that would more than compensate.

Now, there is no obvious next bubble to save the day. If housing and commodities do what I expect, the TSX is in for the mother of all bear markets.

At least we can all still buy doughnuts at Tim Hortons.


Read more: [link to www.businessinsider.com]
 Quoting: Luisport


Yes!
It's all crashing and will soon burn..
Anonymous Coward
User ID: 243849
Canada
06/05/2012 09:05 AM
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Re: The Risky Toronto Stock Exchange Is Now Scarier Than Ever!!!
Commodities boomed because they are priced in U.S. dollars and the U.S. gov't let the Federal Reserve print trillions out of thin air which has caused massive inflation lowering the dollars purchasing power. The current drop in commodities is a result of the strengthening of the U.S. dollar due to a massive influx of European & Asian wealth fleeing Europe because of Greece, Spain, Ireland, Portugual, etc, etc.
Luisport (OP)

User ID: 17408962
Portugal
06/05/2012 09:18 AM

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Re: The Risky Toronto Stock Exchange Is Now Scarier Than Ever!!!
bump
CultivatingMass

User ID: 15716609
United States
06/05/2012 09:40 AM
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Re: The Risky Toronto Stock Exchange Is Now Scarier Than Ever!!!
damn luis you are always on top of this econ shit

ive learned more from your threads in the past month than all over the past year of 2011

bring it ooooon!!!

doomon
Luisport (OP)

User ID: 17408962
Portugal
06/05/2012 09:46 AM

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Re: The Risky Toronto Stock Exchange Is Now Scarier Than Ever!!!
damn luis you are always on top of this econ shit

ive learned more from your threads in the past month than all over the past year of 2011

bring it ooooon!!!

doomon
 Quoting: CultivatingMass


Thank you so much!hf
Anonymous Coward
User ID: 15859949
Canada
06/05/2012 10:05 AM
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Re: The Risky Toronto Stock Exchange Is Now Scarier Than Ever!!!
That pretty much sums up how screwed we are up North.
5 stars!
Anonymous Coward
User ID: 15859949
Canada
06/05/2012 10:17 AM
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Re: The Risky Toronto Stock Exchange Is Now Scarier Than Ever!!!
BTW, I don't think that the insurance by CMHC will make any difference. We are already taxed to the max, and adding the equivalent of the entire foreign debt to prop the loans by CMHC insurance will surely lead to extreme protests and social unrest.
Bottom line is: Either banks get saved saved and we get total anarchy from the young generation, or banks fail and boomer assets collapse.
Chose you poison, dear Canucks.
Anonymous Coward
User ID: 6988499
Australia
06/05/2012 10:25 AM
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Re: The Risky Toronto Stock Exchange Is Now Scarier Than Ever!!!
.... sorry, I thought it said "Tomato" Stock exchange.
cruise
Anonymous Coward
User ID: 16498275
Canada
06/05/2012 11:48 AM
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Re: The Risky Toronto Stock Exchange Is Now Scarier Than Ever!!!
I own a courier company in downtown Toronto. We service all different sectors of the job market. BUSINESS IS SHIT

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