₦airaland Forum

spikedcylinder:
Me I was just making inquiries on Busta's behalf o!

doyin13:
The problem in the automotive industry is not GM's alone.
Even the rampaging Toyota has suffered steep losses in market shares
and its stock price as well as those of the other big auto makers in Japan
are at the vanguard of the freefalling Nikkei

Any bad news on GM (number 1 automaker) will surely bring down stocks. Do you know the weighting of GM in DOW jones index? Japanese automakers will fall because of the slowdown in the US market (remember their number 1 export destination)

Oil coming down should be seen as a good thing cause it was largely responsible
for the higher headline inflation numbers that particularly held the unbelievably hawkish
and irrational ECB president in check.

Yes oil prices coming down is a good thing looking @ it from consumer's point of view. But looking @ the other end it might lead to deep and troubling political, economic and environmental consequences
Cheap oil will probably bankrupt the small oil producers and oil equipment companies (I know we had be talking about an alarming cheap rate somewhere in the region of $30 - $40 per barrel)
Cheap oil will further increased the dependence of the West, on foreign oil imports, resulting in larger trade deficits. Do you know that several studies have indicated that there is a negative correlation between the fluctuations in the oil price and the gross national product of Western countries. From 1982 to 1986, when oil prices were high, the economies of the U.S, Japan and Western Europe were expanding, whereas the second half of '80s, when prices collapsed, it was marked by recession.

Development of oil reserves is tied to the global economy. Oil-producing countries must maintain a high level of revenue from oil sales if they are to continue developing their infrastructures and industrial basis, and at the same time invest in their oil industries to maintain and develop their resources to meet worldwide demand. All of this means more jobs in the West, since the oil producers rely on the West for the necessary technology.
Finally, consider the environmental effects of cheap oil. The main culprit of air pollution is fossil fuels, mainly oil, which in the U.S. accounts for 85% of fuel use. There are hidden costs of cheap oil, which we pay for through air and water pollution, global warming and acid rain.
Cheap oil induces people to overuse it and thus discourages development of alternative sources of energy that are environmentally friendly. It affects the economy negatively. It costs us huge sums in health care. It causes social and political instability abroad.


You do have a point, the excesses of the recent credit bubble need to be extinguished from
the system, that said, not at the alarming irrational rate at which the process is going at the moment.
I actually told my friends when dow was close to 14000 that we were due a big correction because everything didn't just add up (all the fundamentals were wrong (high inflation & slowing growth)
Funny thing is i was bearish in dow and had about 10 stakes in it which if i was to cash out would have given me a whopping profit of over £50k (not bad for a side job as i am a casual trader)


All it would take is for some contrarians to take bullish bets on select equities and we might be going up
almost as fast as we have come down.
I won't be 2 confident on that front as the undermining fundamentals of the markets will still remain:

Ongoing part nationalisation of banks (Icelandic banks are being nationalised and it was quoted that some government departments in the UK have exposure of close to 1billion pounds in the iceland bank debargo)

Growth forecast in the good old US of A is not going to change overnight. In fact the current forecast is the next 3 quarters is somewhere in the region of 0 to negative growth

Companies will continue to struggle to meet quarterly forcasts of the financial reports.
Can you just imagine yahoo's shares are currently @ 13 or so dollars when microsoft actually wanted to buy it for $33 per share about 3 or so months ago.

House prices will continue to fall as people will continue to default on their mortgage payment cos of loss of employment/income.