2016 - A tough year?

[pcuser123]

Are you saying that the crashes in 2000 and 2008 are due to margin debt and margin calls?

No. Margin debts are never the causes. Market good, margin debt will rise. Market bad, a small market plunge for whatever reason will cause banks/brokers to make margin calls. When that happen, it will accelerate to form a crash. Like pouring kerosene onto fire.

 

[pcuser123]

El Nino will bring hardship but it's hardly likely to trigger a market meltdown. I don't recall any years where there has been a strong El Nino and an accompanying market rout.

.

1987-1988 El-Nino, market crash on October 19, 1987 when the Dow Jones dropped over 22% in one day. Commodities, minings, oil stocks will be affected.

 

[pcuser123]

...
The contention that commodity stocks and oil stocks are weather related is VERY weak....

Food price and metal prices will rise. Oil price will definitely fall in Winters

Drought linked to a 2007 El Niño sparked a surge in food prices, including a trebling in the cost of rice to a record over $1,000 a metric ton in 2008 that sparked riots in countries as far afield as Egypt, Cameroon and Haiti. The last El Niño in 2009 brought the worst drought in nearly four decades to India, cutting rice output in the world’s number two producer by 10 million tons and boosting global sugar prices to the highest in nearly 30 years. Source: www.gmanetwork.com

 

[pcuser123]

....poor weather may force farmers to use more fertilizers which is derived to a great extent from petroleum. So, poor weather leads to increased use of oil.

more fertilizers? El-Nino either bring floods or droughts. Winters will be warm and less oil usage.

 

[pcuser123]

El-Nino will cause fish meal and fish price to rocket while the fish company stock will plunge as there will be lesser fish esp anchovy to catch.

 

[IronMac]

No. Margin debts are never the causes. Market good, margin debt will rise. Market bad, a small market plunge for whatever reason will cause banks/brokers to make margin calls. When that happen, it will accelerate to form a crash. Like pouring kerosene onto fire.

Ok, so you're saying that the market will turn bad (for some reason), that will trigger margin calls and the whole thing becomes worse?

 

[IronMac]

1987-1988 El-Nino, market crash on October 19, 1987 when the Dow Jones dropped over 22% in one day. Commodities, minings, oil stocks will be affected.

1987-1988 was a moderate El Nino event.

Strong El Nino years were 1957-1958, 1965-1966 and 1972-1973. Very strong El Nino years were 1982-1983 and 1997-1998. I can only recall the US market in 1999 as being an excellent year.

http://ggweather.com/enso/oni.htm

 

[IronMac]

Food price and metal prices will rise. Oil price will definitely fall in Winters

In certain areas, not all.

 

[IronMac]

more fertilizers? El-Nino either bring floods or droughts. Winters will be warm and less oil usage.

For the US, it is expected to bring more rain to the Western and Southern US. Excellent news for farmers then. Lower prices for food. Oil prices may be lower than even the trough they are in now.

 

[IronMac]

El-Nino will cause fish meal and fish price to rocket while the fish company stock will plunge as there will be lesser fish esp anchovy to catch.

Well, not exactly. Have a look at this Reuters article. It says that this year's Peruvian anchovy first season's catch was higher than for 2014. And the gov't approved a second season for this year.

http://www.reuters.com/article/peru-fishing-anchovy-idUSL1N12Z1T220151104

 

[Average]

Got citations for your (pcuser123) claim? Did some prof write a paper suggesting elnino's impact on global economy?

Sent from your gal nex door using GAGT

 

[skyjuicetse]

For the US, it is expected to bring more rain to the Western and Southern US. Excellent news for farmers then. Lower prices for food. Oil prices may be lower than even the trough they are in now.

If the rain is moderate, then ok. But El-Nino tends to create havoc in weather.. either flooding or draughting.. not so good to farmers when that happened

 

[skyjuicetse]

Well, not exactly. Have a look at this Reuters article. It says that this year's Peruvian anchovy first season's catch was higher than for 2014. And the gov't approved a second season for this year.

The first sentence say it all

setting the quota at a lower-than-usual 1.11 million tonnes after warmer seas linked to El Nino scattered stocks of the cold water fish.

The first season, started from April 15, is almost more than whole year of 2014. This is because there was less than 2 months of fish catch in the 2014 season (red) due to mild El-Nino. When first season catch started in April 2015 (light green), the fish mass was there and farmer reaped as much as they could. The fish mass died fast. Very likely, no fish catch for a long time after the first season.

.[/IMG]

 

[yihao93]

May be this chart will drive the market. Shanghai market crashed recently due to margin debt. NYSE's margin debt is at peak and about to make a turn.. once the turn started, it will be quick like the previous ones in 2000 and 2008. Everyone panic and the banks/brokers will start making margin calls

whats the reason behind the negative r/s between credit balance and how much s&p closes at?

 

[zuoom]

It would be a great year.

 

[NewInvestor]

a bit of haze u all worried till like that

u all never go china before?
see beijing the air... is LOL, they also like that able to continue growing their economy well

the world will adapt to the climate ba.......nature is not scary... human is more scary LOL

putin press one nuclear bomb, stock market down 20-50% riao

Lol. I think nuclear bomb will bring it down by 80%.....

 

[skyjuicetse]

whats the reason behind the negative r/s between credit balance and how much s&p closes at?

The credit balance is the $ amount of stock plus the deposits in the margin account minus the margin debts. It is always negative or 0 as one always borrows the money from the brokers.

The more the negative credit balance, the more the investors borrowing money from the brokers. If the investors' account balance becomes negative (due to losses in stock value), the brokers will make margin calls or sell your stock at lelong price to cover the losses. It works for shorts and longs.

 

[skyjuicetse]

a bit of haze u all worried till like that...

Haze is pollution related. El-Nino is the weather related. Haze and El-Nino are entirely different thing.

 

[pcuser123]

The credit balance is the $ amount of stock plus the deposits in the margin account minus the margin debts. It is always negative or 0 as one always borrows the money from the brokers.

The more the negative credit balance, the more the investors borrowing money from the brokers. If the investors' account balance becomes negative (due to losses in stock value), the brokers will make margin calls or sell your stock at lelong price to cover the losses. It works for shorts and longs.

credit balance is explained the top left hand corner of the chart. Looks like credit balance can become positive during a crash.. that why, if you know how to short, it can be very profitable.

 

[pcuser123]

Haze is pollution related. El-Nino is the weather related. Haze and El-Nino are entirely different thing.

El-Nino can cause haze but haze cannot cause El-Nino. Haze can be controlled but El-Nino, natural phenomenal, uncontrollable but preventable.