Good morning,

Confession season is in full swing with many companies using continuous disclosure requirements to come clean on how bad things are…Channel Seven ,Coffey ,JB Hi Fi and now IPL and ORI to join the list.NAB today announced that they cannot sell their UK business because things are getting worse over there so they are taking a hatchet to the thing instead..’theres a bad debt rising!!’However the underlying business is going ok and then there is the yield…so not too much to get worried about yet!

The overseas markets were wrestling with the conundrum of lousy economic figures and good earnings numbers..at the moment the earnings numbers seem to be winning but only just…at some point the economy will be the focus..news out of Spain that 1 in four workers are unemployed is not good..youth unemployment is worse9! In 2)…not sure the end game here is going to be good..I FEEL A BAILOUT COMING! problem is that the austerity that Europe needs comes at a huge price and the growth evaporates and then it’s the death spiral..Spain is NOT Greece..it’s much worse and will really hit ‘Zombieland’ hard.

 

I remain bearish on a number of fronts…our local economy is struggling big time and a 25 basis point cut will not do the trick..we are all sick and tired of Canberra..labour and Liberal are both asleep at the wheel..Julia has lost the plot whilst Tony looks like he needs to come up with some policies quick..good article over the weekend in the SMH about Abbott and Barry O Farrell in NSW…easy in opposition just to keep saying no but we need a viable alternative to the policies of Julia…anyway whatever happens it’s time for them to go..Slipper and Thomson are the final nails in the coffin..

 

Heard Twiggy on the radio this morning…he should run for PM!

RBA meets tomorrow ..will cut but won’t be enough, they have misread the economy badly and now well behind the 8 ball I am afraid..why do we pay Uncle Glen $1m a year?

Things of Note

 

1.NAB restructures its UK business and bigger bad loan than expected..Real results next week.

2.Some UK residents having Missiles popped on their roofs..nice..I wanted Satelite TV but Rockets so much better!

3.US GDP below expectations again!!!These economists are a waste of time! 2.2% NOT 2.5 %

4.Spotless Group says yes to takeover.

5.SPI up 28 points ..won’t last..again volumes will be low.

6.WBC cuts its fixed rate mortgage rates..who needs the RBA anyway!!

7.NCM now being talked about as a takeover stock..that’s desperate.

8.Budget next week..should be a doozy…still they may never get to implement it!!

9.Even US chiefs have now started commenting on how dismal our economy is… Last week, the chief executive of Illinois Tool Works, a 100 year-old manufacturer and Fortune 200 company, told an audience of US analysts that the Australian economy was ”slowing significantly”, and that that the downturn had taken his company by surprise.

10.ANZ figures Tuesday..WBC Wednesday.. INSOLVENCIES across Australia’s small business sector are rising, with the number of companies put into in external administration in February reaching the highest level since insolvency statistics were introduced in 1999.

I continue to believe that the Sell in May strategy is the one to follow as we head into the Northern Hemisphere summer…maybe not everything but it may be a good time to take the top off some holdings and have some cash around for the Aussie winter…I continue to advocate stock picking is the name of the game and expect the next quarter to show minimal gains in the index I am afraid…

 

Shakespeare had a phrase for the political disaster that is the ALP…’Something is rotten in the state of Denmark’

 

Clarence

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