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No big surprise. Many commentors on blogsites have been expecting this. Hot money comes in easily, hot money goes out easily.

Those in power will now claim that the "evil foreign funds" are screwing around with our stock market.

I only pity the ordinary fellas who got in recently after all the hype that was built up. Most funds / big players that entered right at the start of the wave will still be in the money even after this sell-down.

Hi Jeff Oii,

Wondering why information of Financial Ticker at www.bernama.com.my have different value that the real one... have to look!

Dear Jeff,
I appreciate your spectrum view on our financial market. Since my last burn-out relying 100% on market analysts, I seldom make investment without checking out your alternative analysis. This time, I presumed less retailers got caught red handed. Thanks.

"What hit you? Who hit you? Ask the retail players."

I think differently. There is no victim nor victimisation. There is no evil hand that spooked the Chinese market that caused the global market to tremble. The global market itself was ready for a correction - only this time it chose the events that passed as its starting point. Profit taking.

The Chinese authorities were giving out (If I remember correctly, two) warnings to retail traders about an impending burst in their bubble. It went unheeded.

This is a zero sum game. Someone has to loose money - cold but sadly true. Retailers should be informed about the risk they are putting thier money under.

What hit you? Who hit you? Ask the retail players."

I think differently. There is no victim nor victimisation.

But what if (say) your father urges you to invest your savings to chase up the stockmarket even when the market is overheating, and being the filial son, you got burnt? You can still argue that it is caveat emptor, but doesn't your dad share in the culpability in giving lousy advice?

Someone remarked to me that Malaysia was perhaps the only country where the Head of Government asked her citizens to support and invest in the share market. From my conversations, many did not enter the market earlier because of poor liquidity and the unwillingness to risk the last savings. With headlines screaming 'Big Gains', another week or so, many retailers will eventually enter the market, tempted to borrow and to trade on margins. I am glad the correction come sooner than latter. Good money should not be chasing after bad money. The big timer speculators will lose heavily this time around. It is not easy to liquidate the multi billion trades build up over last few weeks. The bonfire may have started. Just relax if you are not the menu.

Thailand's political system is certainly messed up, but it at least has ministers who dare to own up and quit when they prove incapable of handling their portfolio.

Ministers in Bolehland will never do that. They just resort to stonewalling, muzzling the press and threatening to use the OSA or ISA to silence criticism.

The buble has to burst. Anyways, the correction was long due.
Coming monday should be a good day to diversify your portfolio.

Andrew, the father you mentioned has serious credibilty issues, so why do you believe him when it concerns your money?

Wake-up call
Jolts around world zap stock prices -- the question is, does the slide continue? is it a just a blip or a long-term trend?

San Francisco Chronicle
Wednesday, February 28, 2007

ref:
http://tinyurl.com/yr5ogv

Wall Street's worst meltdown in five years, in which major stock indexes plunged more than 3 percent on Tuesday, raised questions about whether the sell-off is a short-term phenomenon or the beginning of a significant market downturn, analysts said.

The day's wave of selling, which wiped out $600 billion in market value, prompted a fierce debate over the direction of the market from this point.

The U.S. stock market has kept climbing despite a softening economy and a growing accumulation of problems, such as the weak housing sector. Until now, investors have largely shrugged off such dangers. The market's tanking could rattle investors out of their complacency, leading to a significant downturn.

"This is a wake-up call to investors that stocks and other asset classes are risky," said Rich Golinski, a principal at San Francisco's Bingham, Osborn and Scarborough, which manages $1.7 billion for high-net-worth individuals.

"People who were underestimating the riskiness of their investments are now realizing they are overexposed, and there will be some selling."

The selling continued Wednesday in morning trading in Asia. Shares in Tokyo, Hong Kong, Australia, New Zealand, the Philippines and Indonesia all tumbled more than 3 percent. The region's biggest bourse, the Tokyo Stock Exchange, saw its Nikkei 225 stock index fall 644.85 points, or 3.56 percent, to 17,475.07.

Hong Kong's Hang Seng Index dropped 759 points, or 3.8 percent, to 19289.30 after opening. Australia's benchmark S&P/ASX200 index fell 206.9 points, or 3.45 percent, to 5,786.9, while New Zealand's market fell more than 3 percent.

After months of steady gains in U.S. stock prices, some experts thought the market needed a jolt of reality.

U.S. stocks "have been way, way overdue for a correction," said Barry Ritholtz, chief market strategist for Ritholtz Research & Analytics, told the Internet news service MarketWatch. "There is a fundamental slowdown of the economy, which investors have ignored for too long."

Despite Tuesday's rout, many analysts were sanguine that the damage would be short-lived.

"Is it a blip?" said Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities in New York. "Our view is the equity market will be up for the year. One day will not change that."

"My suspicion is that it won't last very long," said James Paulsen, chief investment strategist at Wells Capital Management in Minneapolis. The market has not been volatile lately, he said, so many traders were primed for that to change. "So many people were waiting on (increased volatility) that it magnifies it somewhat," he said. "They're waiting for any bad news so they can dump."

Paulsen said he didn't think there has been a significant negative change in fundamental economic factors.

"It's a feeding frenzy of fear," he said. "I don't see anything fundamentally horrible or wrong in the world anywhere at the moment. It's not like there has been a default or currency collapse so I think it could be fairly quickly resolved."

Tuesday's Wall Street plunge was sparked by a spate of downbeat events around the globe that spooked traders, starting with a 9 percent plunge in China's stock market. That was followed by disappointing reports on U.S. durable-goods orders and real-estate sales. Investors also are wary of recent sharp rises in sour loans in the subprime mortgage market, which provides home loans to borrowers with troubled credit records.

Compounding the financial anxiety, former Federal Reserve Chairman Alan Greenspan, whose utterances are still treated with the same reverence they were during his almost two-decades term, said in a speech Monday that it is "possible" the U.S. economy could slip into recession this year.

"On top of that, someone tries to blow up (Vice President Dick) Cheney," said Scott Merritt, U.S. equity strategist with J.P. Morgan Asset Management in New York, referring to a suicide bombing in Afghanistan. "It was a banner bad news day."

The Dow toppled 416.02, or 3.29 percent to close at 12,216.24. It is now in negative territory for the year. At one point on Tuesday, the Dow plunged as much as 546.02, but it recovered some ground in the final hour of trading.

The Nasdaq composite index dropped 96.65 to 2,407.87, down 3.86 percent. The Standard & Poor's 500 Index fell 50.33 points to 1,399.04, off 3.47 percent.

The day's events underscored the increasing interconnectedness of global markets.

The first catalyst was the Chinese government's statement that it would crack down on stock speculation, which triggered an agonizing sell-off in that country's market. That plunge in turn sparked sell-offs in the United Kingdom, German and French markets, as well as on Wall Street.

"The psychology is, there is only one stock market across the world. It happens to be traded in a bunch of places but it moves increasingly in lockstep," said J.P. Morgan's Merritt. But the Chinese market needed a correction and the government's clampdown on speculation seemed appropriate, he and others said.

"China is an extremely frothy and risky market," said Richard Welty, chief investment officer at Welty/Solari Caital Advisors in Lafayette. "The Chinese people are known to love to gamble. They recently were using credit cards to buy stocks and (a financial instrument similar to) equity lines of credit on their homes. Home mortgages are fairly new in China anyway. Using a line of credit on (your home) to buy stocks is not a good idea."

One factor that intensified traders' fears during the day turned out to be caused by a technical glitch. At around 3 p.m. Eastern time, the Dow sustained a jaw-dropping freefall, losing about 200 points of value in a minute. The reason was that Dow Jones computers had become overwhelmed by the surge of orders. When the company switched to a backup system, it suddenly processed backlogged trades, causing the rapid plunge. The actual stock prices remained accurate, but their fall should have been spread out over a longer period of time.

Michal Ann Strahilevitz, an associate professor of marketing at Golden Gate University in San Francisco, said Tuesday's events show how investors have a herd instinct.

"When you see things drop that fast, it's panic mentality," she said. "My guess is (Wednesday) is not going to be a pretty day, but probably not as ugly as (Tuesday)." --
Bad-news bears

Some of the factors that started a sell-off on Wall Street:

-- The Chinese government said it would curb speculative trading, causing the Shanghai Composite Index to fall 8.8%.

-- January U.S. durable goods orders fell 7.8%, raising concerns that manufacturing is stalling.

-- Sales of existing U.S. homes in January were down 4.3 percent from a year ago, and the median sales price fell 3.1%.

-- Alan Greenspan said in a speech that it is "possible" the U.S. economy could slip into recession later this year.

-- Investors continued to worry about the health of subprime lending industry, which provides home loans to borrowers with credit problems.

NOT to worry folks, the fund managers are reacting and following the herds’ instint. “There's no way that we will be decoupled from what happens to the major global markets. It's like a tidal wave, you can't run.'”
Our 2nd Finance Minister Nor Yakcop is NOT worried at all as “the economic fundamentals have not changed. They are still robust and the correction in the last two days has been due entirely to external reasons” More details & reports from:

http://powerpresent.blogspot.com/2007/02/klci-fell-82-28th-feb-2007-nor-yakcop.html

Andrew, the father you mentioned has serious credibilty issues, so why do you believe him when it concerns your money?

I don't ... but I just feel sorry for the 'victims' who did. He is after all the family's baPak lah :>

That's a good one Andrew....

Seriously, can anyone take advice from this baPak?

When the stock market is up he will say it reflects our economy... when it is down he says it doesn't reflect the economy...

baPak..just talk to make you feel good..me thinks baPak don't know anything about stock market.