Tags

, , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Morning all,

Another Black Caviar moment as Wall Street made it 20/20 Tuesdays that the market has been up…pretty good record …higher house prices, better consumer sentiment and nowhere else to put money, all conspired to keep the Dow bubbling along…it’s now up nearly 4% for May..and here we have the ASX 200 down 4% in the same period…not complaining as I had hoped for this pullback…but just to add insult to injury the mighty house of Goldman Sucks is now calling the switch from banks to resource stocks..well you know what. I think they are right to buy resource stocks but not sell the banks..sure the performance of the banks is not going to be stellar in a stalling economy but the yield argument will put a floor under the prices..plus they can always sack a few more people or cut back on the corporate entertaining and I reckon that in a years time, we will be looking at the same headlines we have every year of record profits for the banks…let’s face it there is little competition in their cosy club here…so ignore Goldmans and focus on sustainable yield in a beautiful oligopoly!Lets face it these geniuses were/are predicting the fall of the Iron Ore price to sub 100 and they still are pushing BHP over WBC..please….still talking of WBC see my comments later!!

Expect our market to shrug off the Sydney fog today..yeah I know the SPI did nothing but there are buyers out there..somewhere in the fog..Gold down ,Iron Ore down so expect to see more support for the defensives again but as May is drawing to an end I think the 4% is overdone given the state of the US market..of course there is a lot of overseas money chasing the Dow now and selling our market…after all the US is seen as coming out of the fog whilst we are going into it…Aussie Dollar is telling us that..trouble is I am an Aussie broker and it’s hard to buy US stocks..and let’s face it we will get dragged up by the Dow…however if you do want US exposure IVV does offer an ETF way to get set..

Finally called one right yesterday…bout bloody time…today we are going to rally 10 points up towards that 5000 level!!Yeah I know the dollar is being walloped again and commodities are easier but weren’t we all wishing for a lower dollar…be careful what you wish eh!!!

Idea of the Day

Somebody believes that banks are value as ANZ has announced a $425m buy back of its ordinary shares…it will offset the DRP and the option plan ..but it shows confidence in the banks…this is a positive…

Refer to yesterday’s yield table but I remain of the view that the banks are starting to offer some attractions!!I would be a buyer at these levels…please don’t call me when they are back up asking if it’s too late to buy them…yes will be the answer…they won’t make you rich like they were when they were bombed out but as Einstein said once “the most powerful force in the Universe is compound interest”!!And this holds true on bank yields!!

Things to make me go all Great Gates-by

1,.Watched Bill on QANDA last night..talk about revenge of the nerds as the world’s richest man spoke eloquently and charmingly on his charity work..pretty impressive…although the most impressive thing was to watch him squirm when asked by a cocky student about Microsoft using off shore tax havens to avoid tax…ballsy question on National TV…but ultimately hats off to Bill for using his superpowers for good not evil..hope Gina was watching!!Of course she is giving her money away in other ways..mainly to lawyers!

2.US prosecutors have announced what they say is the biggest international money laundering prosecution in history – a $US6 billion ($A6.2 billion) trail that allegedly includes $US36.9 million ($A38.4 million) deposited in Westpac Bank accounts….making headlines in the media…should mean the stock is hit a little…storm in a tea cup so watch for a chance to buy them!

3.And it’s easy to see why we all distrust our pollies and hate them..why the informal vote keeps going up..I mean if voting wasn’t compulsory would anyone bother…news yesterday that the Pollies are pushing through election fund proposals rewarding parties with 33 cents per vote backdated to April is great..in these austere times its good to see there is such an emergency in the budget that both parties agree!!!And yesterday I tuned into question time while I was at the gym…I have seen better behaved kindy classes!!!Great leadership and then there is Bill Gates!!True leadership…

4.BHP Billiton has flagged ongoing rationalisation of its coal operations, which will include further divestments as it works to lift returns.It has already idled production at high cost open cut mines such as Norwich Park and Gregory in Queensland, and it is seeking to sell its mine in New Mexico, USA, to the Navajo Nation. According to US reports, this could raise an estimated $US85 million.

5.Echo boss John Redmond said the Crown Sydney plan had gone from a boutique VIP facility to a casino tower “on steroids.”

6.Santos has acknowledged the industry has been slow in addressing the concerns of rural communities about coal seam gas developments. As the company warned about a potential gas shortage in NSW by 2015 unless major reserves were opened up….really you don’t say!!!

7.Pharmaxis shares plummeted 13 per cent to close at 20c after it announced the major restructure, including the loss of 45 jobs and a decision to slash costs by $12 million.

8.The NYSE has reported that April margin debt, as expected, hit all-time records, just in time for the S&P’s own all time high fireworks spectacular.  Rising from the just shy of summer of 2007 levels posted in March, or $380 billion, April margin debt not surprisingly rose to a record high of $384 billion.

9.German Finance Minister Wolfgang Schaeuble warned on Tuesday that failure to win the battle against youth unemployment could tear Europe apart, while abandoning the continent’s welfare model in favour of tougher U.S. standards would cause “revolution”. Germany, along with France and Italy, backed urgent action to rescue a generation of young Europeans who fear they will not find jobs, with youth unemployment in the EU standing at nearly one in four, more than twice the adult rate.

10.On the subject of Zombieland..one of my favourites…below is a chart from Zerohedge on one members confidence levels…which country..

French Household confidence courtesy of www.zerohedge.com

French Household confidence courtesy of http://www.zerohedge.com

‘That will be the French’ as Captain Jack would say…still market pushing its highs..disconnect? You betcha!!

And finally..thanks Barry …

I rear-ended a car this morning.. So, there we were alongside the road and slowly the other driver got out of his car.

You know how sometimes you just get soooo stressed and little things just seem funny?

Yeah, well I couldn’t believe it…. He was a DWARF!!!

He stormed over to my car, looked up at me, and shouted,

‘I AM NOT HAPPY!’

So, I looked down at him and said, ‘Well, then which one are you?’

And then the fight started

Fran, not sure your ones are politically correct but good none the less….will try and censor and hope no one gets offended!!!

Clarence

XXXX

 

Any financial product advice contained in this email is general financial product advice only and does not take into account any one person’s objectives, financial situation or needs. Therefore, before acting on any financial product advice in this email, you should consider, with or without the assistance of an independent adviser, the appropriateness of the advice, having regard to your objectives, financial situation and needs

Advertisements