Morning all,

The quote above was from WWII when the chief weather forecaster for the Army was asked to be relived from his duties as his forecasts were no better than rolling dice!!

And so last night we had a better Dow..bit of book squaring pre the Non-Farm Payroll number…apparently they are now expecting a bad number so the QEIII will continue..fair is foul etc!!Suspect we may see more volatility here today. It’s a long weekend coming up, the market has been stuffed all week and no one will want to go home too exposed…of course the NCM announcement will affect sentiment…looks like we are going to see more weakness in months to come as the economy continues to disintegrate and business confidence takes a battering…Aussie dollar will break 90 so book US holiday now! Japanese futures are down early as Abe sets out his plan to conquer the monsters that he sees everywhere…mother of dragons watch out!

Would have called it an up day today but after Nikkei futures and NCM am not so sure!!

The Aussie Dollar is the focus- weaker Aussie, weaker market…simple equation…

As I am writing this today NCM has come up with a $6bn charge on assets..writing down stuff as a result of lower Gold prices..expect it to get decimated today…it’s not like they made much money when the gold price was high!!!Looks like $12 is a possibility!!!Dividend gone too…writing off the value of Lihir…another great acquisition from a resource stock..these guys are just brilliant..how much shareholder money has been burnt by bad acquisitions..RIO,BHP I am looking at you too!!!!And still the management draw their huge cheques…gotta ask why!!!

So my road map for the market is further weakness as we go through the next quarter…would not be surprised to see us at 4600 at some point..it’s actually not that far away!!Couple of bad days!!

Idea of the Day –Index Changes

Looking for a quick trade…LNC is going into the ASX200 index on 21^st June..now this event will force fund managers to buy them..lots of shorts about in this one too so combo of short covering and domestic demand will push things up a little…last time they were included in the index they had a huger run…but that was a while ago I admit but around 145 its probably good for a 10-15% bounce..also GEM are going into the index too…so expect some buying from index funds too…they have no choice!

Things to make me go all Milky Bar Kid

1.Kev07 cannot help himself can he…it’s like a scab you just have to keep picking it..let it go Kev..let it go!! The Labour party does remind me a little of the Charge of the Light Brigade-into the valley of death rode the 600!

2.Western Australia, the engine room of the nation’s economy is now in recession after contracting 3.9% in the March quarter and 0.9% in December…I think the rest of the Country has been in that recession for a while..yet people still buy new cars…good marketing!!

3.Putin announces his divorce after going to the Opera with his wife…must have been pretty bad..usually I just fall asleep! Must have been that new Opera, The Divorce of Figaro!

4.ECB and BOE kept their rates unchanged last night and decided not to stimulate further…Zombie marlet fell..that is after they delayed the opening due to a technical glitch!

5.Last night in Zombieland ,Super Mario came out with this classic.. Capital controls, like those in Cyprus, “profoundly distort the markets,” said ECB President Mario Draghi during the press conference, but they weren’t his idea, and the ECB had nothing to do with them, because “it’s not our responsibility,” he said…this as Greek unemployment hit another high at 1.39m people…before the GFC there were 390,000 unemployed…

6.The big issue emerging in the US is student loans!!There is $1Trillion of loans out there!!!!!These are NOT small…some have debts of $150,000 and will take 20 years to repay… While a bankruptcy can wipe out housing and credit-card debt, there’s no forgiveness on student loans. Since a 2005 change in bankruptcy laws, student debt can’t be discharged, barring reasons such as severe and permanent disability. Lenders can garnish income-tax refunds, wages, and even Social Security checks to get repayment. Looks like the interest rate is going to double to over 6% in July!!

7.Hawkish Dallas Fed Chief Fisher had this to say in Toronto this week “we cannot live in fear that gee whiz the market is going to be unhappy that we are not giving them more monetary cocaine.”

8.Palladium has settled at a two-month high and platinum has rallied to an eight-week high on concerns about a potential strike at a South African platinum mine. Meanwhile, gold prices rallied on a sharp drop in the US dollar, which retreated to a one-month low against the euro and the yen. Palladium for September delivery, the most active contract, on Thursday rallied $US5.85, or 0.8 per cent, to settle at $US762.30 a troy ounce on the New York Mercantile Exchange. This was the highest settlement since April 2.

9.”The Reserve Bank of India has advised banks against selling gold coins to retail customers, Finance Minister P. Chidambaram said on Thursday, a day after he raised gold import duty to try to ease pressure on India’s bloated current account deficit.

10. CEO Mike Smith used the word ‘Terrifying’ to describe to his board and senior management the tsunami of disruptive technology about to hit the banking industry. Mr Smith had just hosted ANZ’s directors and executive leaders on a week-long study tour of Silicon Valley in California.And from Wetpatch… it can avoid being charged with anti-money laundering offences if it can prove it had rigorous systems in place, or reported suspicious transactions to authorities, experts say.

And finally…

With all my training to the city to surf at the gym , I spotted a very attractive blonde walking in…

I asked the trainer standing next to me, “What machine should I use to impress that young lady over there?”

The trainer looked me over and said, “I would recommend the ATM in the lobby.”

Have a great long weekend..back on Sky TV at 5.30pm..why do I agree to do a  Friday night?

Clarence

XXX

 

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