Click for Llebroc
Click for Walker
Click for Dockwise
Click for Moonen
Click for Llebroc
Click for Ferretti
Go Back   YachtForums.Com > GENERAL YACHTING DISCUSSION > General Yachting Discussion > Market meltdown...?!

Login to YachtForums
Username
Password

Reply

Market meltdown...?!

 
 
LinkBack Thread Tools Rate Thread Display Modes
Old 02-27-2007, 02:50 PM   #1 (permalink)
Senior Member
 
Join Date: Jul 2006
Location: French Riviera...
Posts: 302
Market meltdown...?!

The Dow Jones was quoted down 507.99 points, or 4%, at 12,124.27 in late afternoon trading on Wall Street, the FTSE 100 closed on a fall of 2.3%, or 148.6 points, to 6,286.1.

All sparked off by a near-9% slide on the Shanghai Composite Index...

Reminds me of tech stocks, the NASDAQ plummet and general downturn in early 2001.

Which freed up quite a few megayacht building slots here and there back then. Or at least, the opportunity to finish "nearly-completed newbuilds".

Are we up for a repeat performance, or worse...?!

PS. I've stocked up on candles and petfood - enough to last 7-10 days...!
airship is offline   Reply With Quote
Old 02-27-2007, 03:05 PM   #2 (permalink)
YF Wisdom Dept.
 
Join Date: May 2005
Location: Western Canada
Posts: 990
China is trying to slow things down a bit. They took a whack of of government owned companies and sold them in to the market. Not all that different a scenario from what happened in the former Soviet Union when many state owned companies were made private.
The Chinese economy is just a bit overheated and needs a little cooling off.
Their trade surplus with the rest of the world is up over 60% year to date over the same period last year. That kind of growth is just not manageable for any period of time.
Codger is offline   Reply With Quote
Old 02-27-2007, 03:08 PM   #3 (permalink)
AMG
YF Moderator
 
AMG's Avatar
 
Join Date: Jul 2004
Location: Sweden
Posts: 4,933
It could be the other way, people are cashing in after a long upturn, about 100% in Shanghai the last year? And while the stock market stagnate the guys are buying yachts to have some fun for their profits...
AMG is offline   Reply With Quote
Old 02-28-2007, 07:09 AM   #4 (permalink)
Senior Member
 
K1W1's Avatar
 
Join Date: Sep 2005
Location: My Office
Posts: 6,288
Hi,

I saw a bit on this on the BBC this morning.

It was saying that in China it is not uncommon for people to mortgage their houses even to invest the money even though it is illegal.

They went on to say that there is a Government sponsored move to try and stop this underway now which is what caused the slide. Whether this is selling off state owned enterprises or not I don't know that was not reported in the news this morning.
K1W1 is offline   Reply With Quote
Old 02-28-2007, 09:39 AM   #5 (permalink)
YF Wisdom Dept.
 
Join Date: May 2005
Location: Western Canada
Posts: 990
By "privatising" so much over the past few years it created many more opportunities for the small investor. Putting those opportunities in front of a population with an inclination towards gambling and no recent history of how a capital market works got a lot of people involved that perhaps should not be. I've been in and out of that market a few times but getting solid information can be difficult. Most mature markets have a ton of regulations covering financial transactions. China, like the old Soviet Union, is just learning to build the required regulations.
As to people taking out mortgages to "play" the market, try and get your head around just how easy it is to get multiple mortgages on the same property with none of the lenders being able to reliably find out about the other mortgages or in some places really nail down who actually has title to the property. There is also a well developed “secondary” economy that performed many of the services not officially available prior to the recent changes.
They’re just figuring out some of the pitfalls but they’ll straighten out what they need to.
Codger is offline   Reply With Quote
Old 02-28-2007, 11:09 AM   #6 (permalink)
Senior Member
 
Join Date: Jul 2006
Location: ...............
Posts: 941
Quote:
Originally Posted by Codger
As to people taking out mortgages to "play" the market, try and get your head around just how easy it is to get multiple mortgages on the same property with none of the lenders being able to reliably find out about the other mortgages or in some places really nail down who actually has title to the property. .
Not sure what type of "registry" system China uses, but in any Commonwealth Country this practice would be impossible.

British Columbia uses a Torrens System, modeled after the ship registry system devised by Robert Torrens. In the Torrens System, a purchaser does not need to search back through each previous transfer. Instead, the purchaser can rely on whatever name shows on the Land Title Registry. If the Land Title Registry shows a person as the owner or a Financial institution holding a lean against the property such as a Mortgage, the purchaser can buy the property from that owner without worrying about how that person became the owner, or being worried about hidden leans.

The Torrens Land Title Registration System provides a sure method for determining and assuring title to land. Under a Torrens System, security of title is based on the four principles of indefeasibility, registration, abolition of notice and assurance.

Since China has been posting double digit market gains for the last 4-5 years a correction is only expected, what was unexpected was the world's reaction to it. It just shows how everyone is on edge.
The one that most people in North America are watching and the Bulls/Bears worried about is the unprecedented annual double digit real estate market surge, and how it's predicted correction or bubble burst will affect the economy as a whole.
OutMyWindow is offline   Reply With Quote
Old 02-28-2007, 11:52 AM   #7 (permalink)
YF Wisdom Dept.
 
Join Date: May 2005
Location: Western Canada
Posts: 990
Our system is not foolproof either. There is a reason that a product generally called "Title Insurance" is on the market.
Anyway, China holds about a trillion dollars worth of US paper so they're in pretty good shape although I don't know what percentage they've converted to or backed up with Euros.
There's only one guarantee when it comes to the markets for any commodity be it steel, money or pork bellies. They fluctuate.
Those that believe that just because a market has shown consistent growth over a period of time so it will continue to grow at the same rate are delusional.
Codger is offline   Reply With Quote
Old 02-28-2007, 12:35 PM   #8 (permalink)
Senior Member
 
Join Date: Jul 2006
Location: ...............
Posts: 941
Just to clarify, “title insurance” came about through Identity theft.
Unscrupulous people find clear title properties, assume that persons identity and register mortgages against the subject property without the knowledge of the true owner.
There was a recent case in Ontario where the Bank demanded payment on the fraudulently registered mortgage from the true property owner, but the Court struck it down and the Bank took the loss.
(I hope I’m not giving anybody ideas).
OutMyWindow is offline   Reply With Quote
Old 02-28-2007, 06:13 PM   #9 (permalink)
YF Associate Writer
 
Join Date: Apr 2004
Location: Coral Gables/Ft. Laud., FL
Posts: 1,303
Codger definitely has the proper handle on this 'hiccup'.

How else does one achieve the pinnacle of the Dep't. of Wisdom?

From the retail world, there is usually an upswing of boat deals when the market tanks... not from 'Joe Six-Pack', necessarily, but from the guy/gal who figures out a new deployment of assets.
Besides being easier to say, 'yachts' are a lot more entertaining than, say, convertible debentures.

And, in four months time, this current market drop gets lost in the wash, anyhoo.
Loren Schweizer is offline   Reply With Quote
Old 02-28-2007, 06:54 PM   #10 (permalink)
YF Wisdom Dept.
 
Join Date: May 2005
Location: Western Canada
Posts: 990
"How else does one achieve the pinnacle of the Dep't. of Wisdom?"

Beats me. I hadn't noticed until you pointed it out. Just a dumb ol' machinist still trying to figure out if I ought to buy a boat.

This gets sent to me at least once a month by off continentals (other than North Americans) that believe I should leave here.
http://www.brillig.com/debt_clock/
What I keep pointing out to them is that as the US$ devalues the actual real value of the payback is in the US's favour. Of course the number is getting fairly large but relative to GNP and total value of all US assets it's not really as crazy as it looks. If I owed that much there isn't a banker on the planet that would dare try and pull a number on me. Very happy that I'm not the Chinese holding that amount of paper.
Codger is offline   Reply With Quote
Old 03-01-2007, 08:23 AM   #11 (permalink)
YF Wisdom Dept.
 
Join Date: May 2005
Location: Western Canada
Posts: 990
Quote:
Originally Posted by outmywindow
Just to clarify, “title insurance” came about through Identity theft.
Unscrupulous people find clear title properties, assume that persons identity and register mortgages against the subject property without the knowledge of the true owner.
There was a recent case in Ontario where the Bank demanded payment on the fraudulently registered mortgage from the true property owner, but the Court struck it down and the Bank took the loss.
(I hope I’m not giving anybody ideas).
There have also been instances of title transfers being registered fraudulently in at least two jurisdictions that I'm aware of. Anyway, it's not a problem here on the scale that it is in some other countries.
Codger is offline   Reply With Quote
Old 03-01-2007, 09:39 AM   #12 (permalink)
Senior Member
 
Join Date: Jul 2006
Location: French Riviera...
Posts: 302
I believe a little Bruce Springsteen is in order: I'm goin' down, down, down...

According to some news reports, the UK's FTSE100 index alone saw £55 billion wiped off companies' values on day #1. That's almost $108 billion! Using the old adage of $1 million per metre length for a superyacht, that's the equivalent of an incredible superyacht 108km (or 72 miles) long...?! Think about it, that's like 1,000 Lady Mouras with enough spare for some decent-sized tenders...

All things considered, what with the scarcity of berths for superyachts in the major cruising areas these days, this correction which might in fact become a downturn or even recession, is probably a good thang...?!
airship is offline   Reply With Quote
Old 03-01-2007, 12:20 PM   #13 (permalink)
Senior Member
 
Join Date: Jul 2006
Location: ...............
Posts: 941
Not wanting to get caught in a market downturn like I did in 1991.
I have decided to take the initiative, with the knowledge that the Sky will be falling; I shifted all my assets towards the umbrella industry.

Like the WHO sang....."I won't get fooled again"
OutMyWindow is offline   Reply With Quote
Old 03-02-2007, 12:32 AM   #14 (permalink)
YF Wisdom Dept.
 
Join Date: May 2005
Location: Western Canada
Posts: 990
Housing equity calculation. That New Math?

This just came to me. Good chuckle for those that actually can balance their chequebook. This applies just as much north of the border by the way.

http://businessopinions.blogspot.com...-mortgage.html
Codger is offline   Reply With Quote
Old 03-02-2007, 06:03 AM   #15 (permalink)
Senior Member
 
Join Date: Jan 2007
Location: Little Rock
Posts: 159
Carry Trade?

Quote:
Originally Posted by Codger
I've been in and out of that market a few times but getting solid information can be difficult. Most mature markets have a ton of regulations covering financial transactions. China, like the old Soviet Union, is just learning to build the required regulations.
As to people taking out mortgages to "play" the market, try and get your head around just how easy it is to get multiple mortgages on the same property with none of the lenders being able to reliably find out about the other mortgages...
How about the Americans, simply fearful of the .5% prime hike on the Yen, who know even less about the global volatility in the $500T deravitives market, than they know about the real politics behind the Reagan/Leo Wanta inititive that actually caused the Soviet slide?
MaxResolution is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes Rate This Thread
Rate This Thread:

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are On



All times are EST. The time now is 10:43 PM.

Click for MotorCheck
Click for McConaghy
Click for Oceanco
Click for Ocean Alexander
Click for Christensen
Click for Horizon


Powered by vBulletin® Version 3.8.7
Copyright ©2000 - 2014, vBulletin Solutions, Inc.

Content Relevant URLs by vBSEO 3.3.2