Good morning,
As the Athenians burned and rioted, the Greek Parliament voted to accept the package..good news right..well in theory..however there is a school of thought that says that they will ultimately default..there is no way they are ever going to ‘austere’ themselves out of this …the country will vapourise..good word that..very popular in financial circles at the moment(MF Global vapourised)..still in the meantime they have bought some time..that’s about all..there is still another meeting of the ‘Zombieland’ finance ministers to approve the money so it’s not done and dusted yet and then they have to persuade the countries to actually contribute to the fund..that’s going to be hard..Austria, Finland and others seem to have long pockets and very short arms!!
So in the words of the great Chris Rea(he was good in the 80’s) “Fool if you think it’s over!”(Google it you won’t be disappointed…) Good article worth a read below.
Anyway I was completely wrong yesterday when I wrote my note..sorry…the Greek vote changed everything and up we went…Banks led the way and miners followed..now everyone is telling me that the economy is wonderful here and unemployment is so low..well Sleep City went yesterday (440 jobs?) ANZ joined the banks to sack 1000,Alcoa looks like 650 are going in Geelong and the other banks are shedding staff quicker that you can say CEO options! So where is all the jobs growth coming from..it’s not..white collar jobs don’t start looking for work immediately..it takes time to realise you are stuffed! But they will ..all this whilst the RBA sees no risk to inflation and the growth rate at its trend..well I can tell you now that things will get worse here especially with the high Aussie Dollar killing local businesses!
So to the market, a surprise profit downgrade from MOC (one of my favourites) was not good..could have been managed better given that the source of the downgrade was increased spending on new businesses..lets hope that the upfront cost is worth it in the long run ..but announcing this on a Friday at 6.30pm is not a good look..not happy Jan..however they are now back to buying country and at 1.25 I would start to accumulate…did sell most clients out at 1.50 after their good run so not a complete stuff up!!
The market will struggle a little today as we got a bit carried away on a wave of optimism yesterday…not convinced but the lack of alternatives for investor money is propelling World markets higher and higher…the squeeze is on..reporting season to continue..oil pushing higher..I am a fan of energy stocks..clean is green..ORG,BRU and COE in the small caps.
Results today from TAH,CDD,GWA..plus NAB business conditions…FMG on Wednesday…report on JB Hifi enclosed..hard to recommend but wasn’t as bad for them as other retailers
Happy Valentines day..hope it’s not unrequited! That’s never fun!
Clarence
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Beeks Downunder-Because not all financial news is boring! 