Morning all,

Ironic really that on the 25^th Anniversary of the 87 Crash Wall Street decided to do a tribute to that day….of course 200 points ain’t what it used it used to be but none the less enough for investors to take note of…Disappointing earnings numbers were to blame especially in tech stocks with Apple, IBM, Microsoft and especially Google bearing the brunt…faceplant though bucked the trend and pushed a tad higher..expect more tech weakness as Microsoft grapples to sell us its latest version!

‘Zombieland’ was again part villain in the piece as the continuing disagreements rumble round..once again Germany seems to be not happy at paying for all this..trouble is the whole Euro was their idea(And France) so they are in a bit deep to pull the pin now!!

This says it all really !

 “As long as there are individual national budgets, I regard the assumption of joint liability as inappropriate and from our point of view this isn’t up for debate…The Spanish government will be liable for paying back the loans to recapitalize its banks. Plans to give the Euro rescue fund the power to inject cash directly into banks won’t be made retroactive.”

                 -German Chancellor Merkel

Expect our market to pull back after last week’s great run..up nearly 2% for the week and volume increasing as well..would think that 25 -30 points with the Golds’ under pressure but buying support at lower levels.

The market has been squeezed higher and we need a pullback..it’s not the end of the rally..I still believe that we will see 4700 by Xmas but nothing goes up in a straight line forever.

Don’t be in a hurry to buy today..may see a better chance tomorrow…risk assets will be more underwhelming than those defensives as investors continue to seek out yield and relative safety…

Idea of the Day:

Patience Grasshopper…patience!

Things to make me go all Monday ,Monday!

1.Chelsea beat Spurs 4-2…that’s the good news…..

2.Spain seems condemned to pay for its own banking rescue after Germany flatly refused to let the Zombieland’s future bank supervisor do so, analysts say.

That is bad news for Spain’s soaring public debt.

3.AGRIBUSINESS giant Archer Daniels Midland, the world’s largest corn processor, has confirmed a friendly cash bid for GrainCorp as it lifts its exposure outside the US. ADM already owns 14.9 per cent of GrainCorp after buying 10 per cent of the company on Thursday night for $11.75 a share – a 33 per cent premium to the previous close of $8.85 – valuing the company at $2.7 billion. If ADM wishes to increase its stake above 15 per cent, it will need approval from the Foreign Investment Review Board. If you have the time worth looking at this presentation from an old colleague of mine who has done awfully well… Stephen Diggle one of the uber wealthy hedge fund successes..strange guy but worth listening to.

4.WALL Street titan Goldman Sachs will have to defend claims that it deliberately sold toxic subprime mortgages to an Australian hedge fund in 2007 as the US housing market began to unravel.

5.Canada has blocked the Malaysian state owned company Petroliam’s bid for control of Progress Energy Resources saying it wasn’t in Canada’s interest…BHP knows that feeling as well!!bit of a pattern here..was a $5bn deal so few people will be disappointed.

6.NAB faces a backlash over pay for execs after the write down on Friday..UK still causing issues..Results due out on 31^st October…

7.The Black Swan in his weekly economic update date has said that significant savings will have to be found to ensure the budget remains on track to deliver a surplus….I suspect some significant dodgy accounting practices will also have to be evoked as revenue falls way short as commodity prices and company profits have been hit.

8.From my mates at Zerohedge.com …”China had imported a whopping gross 512 tons of gold, 10 tons more than the latest official ECB gold holdings. We can now safely say that as of today, China will have imported more gold than the 11th largest official holder of gold, India, with 558 tons.” And on China… ”Chinese oil firm, China National Petroleum Corp, has just started oil production in the country which still has thousands of US troops on the ground”. Expect the US Presidential Candidates to talk a bit more about this!!

9. AGM season continues this week with Treasury Wine Estates, Wotif.com, OZ Minerals, Pacific Brands, CSR, Tatts, BHP and Newcrest among the companies to front shareholders.

And finally…..

A man takes his Rottweiler to the vet and says,
“My dog’s cross-eyed, is there anything you can do for him?”
“Well,” says the vet, “let’s have a look at him.”
So he picks the dog up and examines his eyes, then checks his teeth.
Finally, he says “I’m going to have to put him down.”
“What? Because he’s cross-eyed?” “No, because he’s really heavy.”

 Clarence

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