Good morning,

I wish I had better news for investors out there but the Greek Tragedy is taking centre stage. Club Med is in serious trouble and the move by the Spanish Government to take over their fourth largest bank is the start of what’s to come. There is no doubt in my mind that the Euro experiment is doomed..it’s just a  question of time and the recent elections have just hastened the prospect..I mean what were they thinking ..one ring to rule them all..it doesn’t work..remember what happened to Gollum.. Greece is not Germany, Spain is not Holland and will never be..Their economies are all set up differently and one currency is NOT the answer…so where to from here for the World Economy…well it won’t help that’s for sure…the printing presses will be running overtime and Governments will be bailing out Banks faster than you can say Anglo Irish! It will not be pretty and we will not be immune..I have been saying in these ramblings for some weeks that I thought the sell in May and go away strategy was once again the way to go..I remain convinced that this Summer will see the problems escalate and markets head down or at best sideways..

Every man and his dog is buying TLS as its supposedly immune to the overseas worrie sand pays a fat div..can’t argue with that but it has run pretty hard and even the pretty girls get hurt in the bus crash as they say..I would be lightening TLS in this environment…Gravity always prevails…

 

NAB has announced another record profit or at least a record cash profit of $2.83bn…I know we all love to bash banks for making outrageous profits but wouldn’t we rather have that than their ‘Zombieland’ Cousins..I know I would.

Things to make me go mmm!!

1.Obama says yes we can to Gay marriage,

2.Labour force numbers out today .Analysts..(astrologists) are expecting a loss of 5000 jobs in April taking unemployment to 5.2%….now I reckon it will be worse..

3.Margin pressure continues at the major banks with NAB the latest to attest to this..UK a mess with a loss of $36m from Blighty! No real surprises as number announced last week.

4.Dollar going below parity..been saying it for weeks…expect to see 95c in the future…no man is an island..No country is immune..

5.New chief at BBG..expect the broom to be wielded and writedowns and capital raisings on the agenda..don’t go there girlfriend!

6. Moody’s Investors Service will this month start cutting the credit ratings of more than 100 banks, a move that risks pushing up their funding costs and forcing them to curb lending in a threat to economic growth. THIS WILL NOT HELP!

7.One of my favourite people is the UK independence Parties Nigel Farange..very entertaining..his latest speech is gold..check it out on youtube…his comments  “It is a European union of economic failure, of mass unemployment, and of low growth”

8.11th consecutive outflow from US equity mutual funds pulls cash levels to record lows.. investors pulled out another whopping $6.6 billion out of domestic equity mutual funds.

9.China’s trade balance and Import/export data will be closely watched…

10.Says it all..Sell in May and Go away!!Doh!

Hope you have a good day..it’s still time for helmets and sandbags but when the dust clears yield will be king …will be interesting to see how the market treats ANZ which is Ex Div today…WBC next week and in theory three divs in 13 months for a yield on WBC of over 10% in that time..fully franked but then there is the capital loss issue..let ANZ be our guide on this one..

Thought for the day…

A woman gets on a bus with her baby. The bus driver says: “That’s the ugliest baby that I’ve ever seen. Ugh!” The woman goes to the rear of the bus and sits down, fuming. She says to a man next to her: “The driver just insulted me!”

The man says: “You go right up there and tell him off – go ahead, I’ll hold your monkey for you.”

Clarence

XXX

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