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Old 26-06-2015, 12:05 PM   #1
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USD

What do you think about the current movement of USD? Is US economic heading towards another deflation? Recently the USD has been strong against other currencies despite their economic is not getting any better.

Isit bcos of the crisis in Europe? Thats y money has been pouring into US? We have been seeing a divergence of the oil price and the dollar. Its no longer positively correlated. (Something is strange here). We are already in a global depression. Something to ponder..

So will late 2015 or 2016 see another market crash? I know its kind of evil but I hope the crash will come.
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Old 26-06-2015, 02:03 PM   #2
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No one can predict the future, but the current dollar strength is simply cos everyone around the world is weakening and the Fed is hinting rate hikes every waking moment.
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Old 26-06-2015, 04:17 PM   #3
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What do you think about the current movement of USD? Is US economic heading towards another deflation? Recently the USD has been strong against other currencies despite their economic is not getting any better.

Isit bcos of the crisis in Europe? Thats y money has been pouring into US? We have been seeing a divergence of the oil price and the dollar. Its no longer positively correlated. (Something is strange here). We are already in a global depression. Something to ponder..

So will late 2015 or 2016 see another market crash? I know its kind of evil but I hope the crash will come.
why would u hope a crash will come?

i don't think we are even out of the woods for 2008 GFC yet!

i do hope u r prepare to make a killing when the sell off come and that u can come scooping up the 'good deal' though i don't think anybody will know which point is the lowest to buy in.
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Old 26-06-2015, 05:08 PM   #4
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i am bullish about USD as well, and have been converting a portion of my savings into USD and putting into NYSE and Nasdaq.
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Old 27-06-2015, 08:49 AM   #5
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What do you think about the current movement of USD? Is US economic heading towards another deflation? Recently the USD has been strong against other currencies despite their economic is not getting any better.
Aside from the weird seasonal effects in Q1, the US economy is actually looking pretty healthy. Unemployment's in the 5s, inflation's a tiny bit below the 2% target, and the economy's growing slowly but surely.

Also if the economy is not getting any better, tell that to my landlord; I'm paying nearly as much here in SF as I used to in Singapore.

Isit bcos of the crisis in Europe? Thats y money has been pouring into US? We have been seeing a divergence of the oil price and the dollar. Its no longer positively correlated. (Something is strange here).
Nothing strange here. You'd sort of expect a negative correlation because oil's typically priced in dollars - if the dollar strengthens, the price of a barrel of oil in dollars should go down.

The USD's strength is mostly just a function of interest rates. Interest rate differentials are pretty much the #1 long-term driver of FX rates - and with Europe and Japan yielding basically zero, and emerging markets all looking a bit precarious (ahem China ahem), and Australia cutting rates, USTs yielding 2-3% start to look like a pretty good investment.

We are already in a global depression.
The IMF has pegged global growth at somewhere around 3.5% this year, which is lower than in the past, but that's mostly because China's economy is slowing from its breakneck (and implausible) 8% growth rates of the past.

So will late 2015 or 2016 see another market crash? I know its kind of evil but I hope the crash will come.
Probably not, though I wouldn't be surprised to see a few 10-15% pullbacks here and there. The rule of thumb in America is that you get a 10% pullback about once a year, and a 20% dip about once in three years. (Corollary, if stocks usually return 8-10% a year nominal: waiting for the crash isn't going to help you.) But we simply don't have the hugely-overleveraged conditions in place for another 2008-style crash (outside China, at least - they've just inflated the second massive stockmarket bubble in a decade, and now everyone's acting astonished that it's popping).
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Old 27-06-2015, 10:27 PM   #6
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Probably not, though I wouldn't be surprised to see a few 10-15% pullbacks here and there. The rule of thumb in America is that you get a 10% pullback about once a year, and a 20% dip about once in three years. (Corollary, if stocks usually return 8-10% a year nominal: waiting for the crash isn't going to help you.) But we simply don't have the hugely-overleveraged conditions in place for another 2008-style crash (outside China, at least - they've just inflated the second massive stockmarket bubble in a decade, and now everyone's acting astonished that it's popping).
Oh.. Cos some of the company like the PG, WMT, MMM and KO is way above their intrinsic value. These are the type of company I would wanna invest in but the price is too high right now. Although for PG.. the price drop since beginning of the year but still.. its way too high above the intrinsic value.. So now my question is.. "Intrinsic Value", Is it really so important?

How many of you guys actually looking at the intrinsic value or by sentiment?
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Old 27-06-2015, 11:32 PM   #7
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Oh.. Cos some of the company like the PG, WMT, MMM and KO is way above their intrinsic value. These are the type of company I would wanna invest in but the price is too high right now. Although for PG.. the price drop since beginning of the year but still.. its way too high above the intrinsic value.. So now my question is.. "Intrinsic Value", Is it really so important?

How many of you guys actually looking at the intrinsic value or by sentiment?
Depends. "Intrinsic value" isn't a well-defined thing, so people have different definitions of what a stock's "intrinsic value" is. Even if you mean "book value", it's still a bit nebulous (and anyway, the value of consumer-products firms like the ones you've described isn't in their book value, it's in their revenue streams).

So I guess it depends on the stock, but no, I don't think it's all that important.

That said, you can totally use price-to-book as a metric for things like mREITs that are mostly a function of the value of their investments. An mREIT that only owns liquid agency mortgage bonds, but is trading at 0.8x book value, is either "buying dollars for 80 cents" or it's got something deeply wrong with it.
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Old 27-06-2015, 11:39 PM   #8
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Oh.. Cos some of the company like the PG, WMT, MMM and KO is way above their intrinsic value. These are the type of company I would wanna invest in but the price is too high right now. Although for PG.. the price drop since beginning of the year but still.. its way too high above the intrinsic value.. So now my question is.. "Intrinsic Value", Is it really so important?

How many of you guys actually looking at the intrinsic value or by sentiment?
Did you read about PG in seeking alpha, the reason their price is dropping?
I use to own them myself but I quit. I don't see PG going up in the short-mid term. They are selling off their business, something along 100 of brands.
For a more detailed look, go SA. I have since lost touch with PG.

Instead of WMT, KO, perhaps take a look at JNJ, GILD, PEP or DIS.
Yeah, I like MMM.
Anyway, I don't look at pure intrinsic value, a lot of the names above has a premium due to their longevity, brand names, dividend champions status, cushion against GFC etc... Those things can't be calculated.

Many people would queue up to buy a more expensive fishball noodle at a stall with a long established famous name and good taste vs a stall with no queue and cheaper price even though both are selling fishball noodle.
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Old 28-06-2015, 11:52 AM   #9
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Have been watching usd-sgd movement very closely n with concerns. Expect usd to strengthen fast when Fed raise rates. Every positive data coming out of the US has been followed by a spike in usd lately.

I did a usd 10k wire transfer on 22 June at 1.3405. As of Fri, I would've needed to pay 150-170 bucks more.

How would the spectre of Grexit influence usd-sgd?? I expect Grexit wld pull down usd vis-a-vis sgd. W referendum set for 7 July, there is one week window of opportunity.
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Old 28-06-2015, 12:33 PM   #10
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How would the spectre of Grexit influence usd-sgd?? I expect Grexit wld pull down usd vis-a-vis sgd. W referendum set for 7 July, there is one week window of opportunity.
They won't make it to the referendum. As things stand right now, Greece is going to default on the IMF loan on Tuesday, so the ECB will pull the central bank's ELA lines, so the Greek banks abruptly become insolvent and the only real solution is to pull the ejector seat on the euro.

And even if they do make it to the referendum without falling out of the eurozone (maybe because they declare a week-long bank holiday), the bailout plan they're voting on will have been withdrawn the previous Tuesday along with their ELA lines, so they'll be holding a referendum on a plan that doesn't exist any more.

Greece has blown themselves up; the shrapnel just hasn't reached them yet.

That said, if Greece explodes, I think in the short-term USDSGD goes up; everyone will pull their heads in and rush to (US) dollars. In the longer term, letting Greece go could either be good for the euro (because Greek risk was dragging the thing down) or bad (because the Eurozone is now perceived as more fragile) or neither; but in the very long term, it'll all get lost in the shuffle of interest-rate differentials anyway.
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Old 28-06-2015, 12:40 PM   #11
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Buying USD now! Don't bet your house on it.
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Old 28-06-2015, 01:32 PM   #12
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They won't make it to the referendum. As things stand right now, Greece is going to default on the IMF loan on Tuesday, so the ECB will pull the central bank's ELA lines, so the Greek banks abruptly become insolvent and the only real solution is to pull the ejector seat on the euro.

And even if they do make it to the referendum without falling out of the eurozone (maybe because they declare a week-long bank holiday), the bailout plan they're voting on will have been withdrawn the previous Tuesday along with their ELA lines, so they'll be holding a referendum on a plan that doesn't exist any more.

Greece has blown themselves up; the shrapnel just hasn't reached them yet.

That said, if Greece explodes, I think in the short-term USDSGD goes up; everyone will pull their heads in and rush to (US) dollars. In the longer term, letting Greece go could either be good for the euro (because Greek risk was dragging the thing down) or bad (because the Eurozone is now perceived as more fragile) or neither; but in the very long term, it'll all get lost in the shuffle of interest-rate differentials anyway.
That's what Christine Largarde said to bbc. She also said if there's a resounding yes from the referendum, the deal could be resurrected. She parroted somebody, "if there's a will, there's a way". Doesn't sound cliche anymore, does it??
There's something the creditors are not telling us, you see. On the Greek side, the whole referendum business may just be a charade, for all you know.
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Old 28-06-2015, 01:39 PM   #13
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They won't make it to the referendum. As things stand right now, Greece is going to default on the IMF loan on Tuesday, so the ECB will pull the central bank's ELA lines, so the Greek banks abruptly become insolvent and the only real solution is to pull the ejector seat on the euro.

And even if they do make it to the referendum without falling out of the eurozone (maybe because they declare a week-long bank holiday), the bailout plan they're voting on will have been withdrawn the previous Tuesday along with their ELA lines, so they'll be holding a referendum on a plan that doesn't exist any more.

Greece has blown themselves up; the shrapnel just hasn't reached them yet.

That said, if Greece explodes, I think in the short-term USDSGD goes up; everyone will pull their heads in and rush to (US) dollars. In the longer term, letting Greece go could either be good for the euro (because Greek risk was dragging the thing down) or bad (because the Eurozone is now perceived as more fragile) or neither; but in the very long term, it'll all get lost in the shuffle of interest-rate differentials anyway.
I was surprise when the Greece government said they going for referendum before the talk even started.

Many people was expecting a fiece discussion and maybe a deal.

This referendum already comfirm there is not going to have a deal... Why go in to talk in the first place.

Anyway, I'm not holding any Euro, so not affected in anyway. I would expect Euro to be choppy in the following months to come.

Moving towards USD is a right move, but savvy traders are already in USD since last year.

With Europe Greece Crisis, Middle East ISIS and China Stock Bubble Burst, USA is the current safe haven.
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Old 28-06-2015, 01:40 PM   #14
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That's what Christine Largarde said to bbc. She also said if there's a resounding yes from the referendum, the deal could be resurrected. She parroted somebody, "if there's a will, there's a way". Doesn't sound cliche anymore, does it??
There's something the creditors are not telling us, you see. On the Greek side, the whole referendum business may just be a charade, for all you know.
Taking a macroeconomic view, a Grexit will not bode well for the global economy, if only because of the uncertainty it creates. So in the immediate aftermath of a Grexit, I expect usd will face pressure.
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Old 28-06-2015, 01:49 PM   #15
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Taking a macroeconomic view, a Grexit will not bode well for the global economy, if only because of the uncertainty it creates. So in the immediate aftermath of a Grexit, I expect usd will face pressure.
Doesn't USD usually rises in a world of big uncertainty being a major world reserve currency? Not to mention the impending rise of rates which may happen this or next year.
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