The market seems to be selling-off on the back of limited bad news imo, apart from the dollar that is.

If you can hold your nerve and apart from any short term requirements to offload poor performing stocks, I have a couple!!, my advice would be sit tight. This does not have the feel of the tech(mining!) bubble at all. Difference being there are a lot of good fundamentals, unlike in 2000 when there were a lot of over rated nothing companies.

Saudi cannot "ditch the US Dollar" as hyleo suggests ..... 3 guesses as to what currency oil is traded in?

LOL Cyn.

If the paper becomes worthless (relatively speaking) they could easily change over time and start pricing in Euros or some other strong currency. Americas influence is dictated by it's status as a reserve currency, with many middle east and far east (China especially) holding huge pots of dollars (well over a trillion I believe). As the dollar declines the value of those reserves dwindle. Just as Britain was once "great" and sterling a major currency now over a centry ago, the US too will gradually fade. It won't happen overnight of course, but civilisations rise and fall over the centries and I suspect America will go the way of many before it, probably to be replaced by China.

In my opinion.

Strawbs.

technically i dare say you are correct, but in practice, what will happen i am sure, is that the price of crude will just escalate in $ terms ...... the same effectively applies to shipping rates, where there are two variable carges that are applied - CAF (currency) and BAF (bunkering)

I think that decades from now we will see only 4 currencies in the world of any real value.
Euro, US Dollar, Austro-Asian dollar and Islamic world Dollar.
South America would live with the US, Eastern Europe would be Euro, as would the bulk of Africa. Pacific nations would be with the Austro-Asian buck and parts of North Africa and the whole of the gulf region would deal in the Islamic Dollar.
Far fetched? Might be, but 100 years ago no-one would have predicted world banks and multi national currencies.
Back to my sci-fi books...................
Alan

Cynic, you would be wrong to say that the Middle East would not be keeping their distance from the US Dollar. This year Kuwait switched to a basket of currencies, including the dollar, euro, yen and sterling. Since the switch, Kuwaits dinar has strengthened about 5 per cent against the dollar.

And currently, Saudi Arabia, United Arab Emirates, Qatar, Yemen and Oman will be considering the option of diverting their Riyal to other currencies apart from the US Dollar.

I did here to the effect that the gulf countries were uneasy about Oil being priced in Dollars on the World Service the other day, can't remember what they were going to do about it though.

Seems things are not hunky-dory with their dollar link either:

Gulf states 'must break dollar link'
http://www.gulfnews.com/business/Economy/10170189.html

the riyal is not actually pegged to $ ...... look at ROE .... which i did, and think that i am effectively talking bollox again!

From The Sunday Times at
http://business.timesonline.co.uk/tol/business/columnists/article2935730.ece

Foreign countries hold an estimated $3,700 billion of their reserves in Americas currency. China alone holds well over $900 billion in greenbacks and the amount is rising. The global purchasing power of these dollar reserves is shrinking, posing a dilemma for foreigners holding American assets. Hold on to the dollars and face further losses, or start selling dollars and accelerate the pace of the greenbacks decline. Their solution is to reduce the portion of dollars in the currency reserves being newly acquired, which provides a bit of diversification, but puts less pressure on the dollar than all-out dumping would.

Bernanke & Co know that a rate cut would increase the pressure on the dollar, which would please American exporters but further upset holders of dollar assets. Chinese premier Wen Jiabao has already expressed concern about the shrinking value of his countrys vaults full of dollars, and Middle East oil producers are wondering whether to follow the lead of Kuwait and abandon the dollar as their benchmark currency. If confidence in the greenback deteriorates further, dollar dumping might start the protectionist warfare with which the French president, Nicolas Sarkozy, threatened the US Congress.

During the period between 1929 and 1932, the Federal Reserve eased rates from 6% to 2.5%, a rate-cutting crusade that did nothing to prevent the Dow Jones Industrial Average from plummeting 89% in the steepest stock market crash ever amidst a period of unprecedented economic contraction known as the Great Depression.
From 1984 and 1992, the Federal Reserve slashed rates from 11.75% -- TO -- 3%. This period was marked by the worst stock market collapse since the Great Depression (October 1987), record-high unemployment, a debilitating savings and loans crisis, slow GDP, and economic recession.
Similarly, a Federal Reserve rate cut from 6.5% -- To -- 1.25% from 2000 to 2002 proved impotent against the longest stock market decline since the Great Depression, the tech-bubble bursting, and a brief economic recession.

fascinating history, but probably not relevant to the present

its different this time?

Wouldn't surprise me. Economies are like super tankers, they take a long time to speed up or slow down......even if they hit something! I'm sure I read somewhere that there's an 18 mth to 2 year lag in "cause and effect" with interest rate/policy changes.

In my opinion.

Strawbs.

Not entirely sure where to post this comment, but this thread is as good as anywhere. I have skimmed through most of the threads on the front page today and what stands out is that most of the stocks are in a downtrend; downtrends ranging from the short term to the long term. There are at least two conclusions from this observation I can draw; one MAM posters like to bottom pick and rarely achieve success or / and the Bull market is over and it's time for the bears. Personally, I think it's both. Doesn't say much for our stock picking skills though, which just goes to show, never invest in anything on the basis of what you read on a financial BB :)

Thought I'd noticed that too, but was begining to wonder if my TA was up to scratch! Even in a downtrend though you have spikes to the top of the channel, so it's still possible to make money for those happy to take a risk or two. I get the feeling from a number of the postings that many are taking the "traders" approach to investing these days anyway...... :-)

Personally I'll stay with cash unless the charts behave sufficently to enter at a price I'm comfortable with..... For people with shorting ability I guess downtrends are good news anyway....


Strawbs.

no bear yet

WASHINGTON (MarketWatch) -- The U.S. economy expanded at the fastest pace in four years during the third quarter, growing at a real annual rate of 4.9%, the Commerce Department said Thursday in making its second estimate of growth for the three-month period

US can't lower interest rate indefinitely to create a false economy. Inflation would soon bite.


From Times Online - December 17, 2007

CBI gloom helps depress pound and shares

Shares in London slide more than 100 points as CBI takes a gloomy view of the UK economy and fears grow over US inflation - Peter Stiff

Leading shares and the pound fell sharply this morning after an overnight sell-off of Asian stocks, the highest US inflation numbers for two years and the gloominess of UK chiefs over next year's economic growth.

The FTSE 100 lost more than 100 points by mid-morning but then hovered at about 6,300, down 96.50 points, or 1.51 per cent, while the pound was trading at $2.0138.

Markets were hit in the UK by a CBI downgrade of its 2008 economic forecast, its third revision this year, because of continuing credit market difficulties, a high oil price and weak domestic and global demand.

In its latest quarterly economic forecast the business group puts next year's annual rate of GDP growth at 2.0 per cent, down 0.2 per cent on September’s figure.

It also sees consumer spending growth slowing to 1.9 per cent next year from 3.1 per cent this year.

Adding to the pressure were losses in Asia, led by the banking sector, after reports that the leading regional banks would become involved in the US sub-prime rescue fund.

The market was also reacting to higher US inflation figures, reported on Friday, which reduce the chance of the Federal Reserve cutting interest rates and which sent the Dow Jones industrial average almost 200 points lower.

DOW appears to be in an elliot 3rd of a 3rd , the biggest move wave , take care out there.

can you paste graph please, doctor? Thanks