Derivaties Bubble

Recently, JP Morgan announced that it was going to take a 2 billion dollar loss from derivatives trades that have gone bad. Some analysts expect the actual loss to exceed 2 billion dollar. Some even put the figure as high as 20 billion dollars. The derivatives bubble has grown very much bigger since 2008, what can cause a derivatives crisis? And how big is the derivatives market? It was reported that the 9 largest banks in the US hold more than 200 trillion dollar in derivatives, that is about 3 times the size of the entire global economy. Visit the link below for an interesting illustration.

"The Unregulated Global Casino For Banks"

Don't play play when the bubble bursts.

When to Drink water ?

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Chop Suey

 

 

 

 

 

What is next ?

The only reason for CRB to move toward 2009's low of 200 is a collapse in commodity demand due to possible global recession as indicated by a collapse in the indices of world bourses from Europe to Asia and to America.

US's Dow is the only index that is able to stay on the higher end. Chinese and Japanese stock markets have been in the downtrend channel since July 2009 and April 2010.  Many European nations are already in recession.Greek stock market is particularly bad.

Since the beginning of May this year, the Athen Index has dropped 30% from 695 to 485 (last Friday closing level). Is this the signal that Greece will have no choice but to leave Euro? Under this scenario, all eyes will focus on Greece when it started to print drachmas to see the outcome.

Light and Easy

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CRB Commodity Index

Courtesy of bloomberg.com

Thomson Reuters/Jefferies CRB Commodity Index closed at 281 on Friday. the Index has been moving in a downtrend direction in the last 12 months since end of April 2011. I expect the index to move lower until July to complete its wave 3. Wave 4 rebound may take about 4 months. Wave 5 will take another 5 to 6 months to take the index to below 200 to end the major wave C before middle of 2013.

Courtesy of traderslog.com

Soybeans may have completed its wave 5 of major wave I at 1505 level at the end of April. It closed at 1382 on Friday. Its major wave II pullback may end somewhere between 800 to 1100 for a 30% to 45% correction.

If CRB and Soybeans were to move lower, I would expect the crude palm oil price to move lower too. CPO is trading around Rm 3050 level down 14% from its mid-April high of about Rm 3560 level. It is possible that the wave 3 of major wave C has started. If it move in tandem with the CRB index, major wave C will end before middle of 2013 with a possible low of Rm 1700, another 44% drop.



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She could be a better President for MCA

Kian Sit Har



Kian defended her participation in Bersih 3.0, pointing out that clean elections and the campaign against Lynas rare earth plant in Kuantan were issues that MCA supported

"Nowadays, we cannot be neutral. We have to choose between right and wrong."

"The party may have its stand, but we must take the side of justice. We cannot just follow faithfully if BN or MCA is doing something wrong."

"After saying that Bersih wanted to topple the government, how can you ask him (Hanif Omar) to be part of the panel?"

"We (at the Bersih rally) never thought of toppling the government during the protest,"

"Malacca chief minister Mohd Ali Rustam asked me to step down. I am a MCA member, what right does the chief minister (from Umno) have to ask me to step down?"

"One thing that happens in Malacca - when the vote is counted and you know who the winner is (going to be), a new ballot box from the police or army will suddenly appear. This is unfair. All the ballot boxes must come out together."

"Whether the opposition or the ruling party, our job (as politicians) is to serve the people," she said.

Finally there are human spoken words from a MCA member.

She should be a better choice than Chua Soi Lek as the MCA President if MCA want to remain relevant to the Malaysian Chinese

A night off

Really tired mentally tonight. No Ah Jib Gor, no Lynas, no Dow, no Malaysiakini or Malaysia Chronicle, I just want to have a cup of tea, sit back and listen to this lovely song - Malaguana Salerosa




 I can listen to this song again and again and again ...........



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Great Stars In Music That Have Fallen This Year

Robin Gibb of Bee Gees passed away on Sunday (May 20) following his long battle with cancer. A song writer and a versatile singer from pop to disco and classical. His songs such as 'I started a joke', 'I've gotta get a message to you', 'First of May' and many others were great hits.

Three days earlier on May 17 another great disco singer, Donna Summer, the Queen of Disco has passed away.

Her hits such as 'I feel love', 'Hot stuff', 'I will survive' were hot favorites of young disco-goers.

Earlier in February this year another 2 great singers have passed away. they were 

Whitney Houston with songs 'I will always love you' and

'One moment in Time'

and Davy Jones of The Monkees - 'I'm a believer'

'Daydream Believer'

Thank you, all of you, for all the beautiful songs 
 

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