Morning sports fans,
Another crowded trade got whacked yesterday as the Chinese regulators changed the rules on margin lending..the Chinese market has been going gangbusters and it has dragged in new clients and leverage at an alarming rate..so the authorities have tried to slow the mustangs down a bit..actually a lot ,as the index dropped nearly 8% yesterday..and they have the GDP number today to really stick it in..our market capitulated all of its gains yesterday as financials and other just threw in the towel…from up 70 to a miserly 10 was a pretty disappointing reaction..and we even had an upgrade from MacBank,but it just goes to show how committed investors are..not!
Overnight Zombieland went to all-time highs as the pressure mounts for ‘Do Nothing’ Draghi to pull out all the stops..I reckon there is only one way this can go and that’s badly..so much expectation and everyone has got long again..sound familiar…expect Euro Trash to pull back…there is the Greek vote on Sunday too which will be interesting..more volatility to come..even Denmark lowered its interest rate last night to try and fight the impending ECB largesse… The Danish central bank today cut its deposit rate to minus 0.2 percent, matching a record low, from minus 0.05 percent and lowered its lending rate to a record 0.05 percent from 0.2 percent….continuing to defend its Krone peg..
US last night was closed for Martin Luther King day and Obama’s State of the Union …so all eyes today on China..again…Gold sold off as did oil again with the Saudis talking down the price as they prepare for a long siege to take out the fringe players ie. the US Shale producers ..they are now looking at budget cuts …
I recently watched the old Russell Crowe movie, ‘A Beautiful Mind’, which was all about efficient game theory…we are seeing this in action right now on a grand scale… “In competition, individual ambition serves the common good.” Said economist Adam Smith “Everyman for himself, gentlemen” says one of John Nash’s friends. However our Russ suggests that everyman for himself does not work if you want to get lucky! He reckons the “best result comes from everyone in the group doing what is best for himself and the group.” So it is with OPEC…now the price has dropped, everyone has to produce more to ensure the same revenue..increased production pushes down prices which means increased production to raise revenue which means more production…now the fall out will take a while…6 months time it will get nasty…but we have gone back to everyman for himself ..and then no one gets the blonde!!
Market still looks nervy and any disappointment from Chinese GDP today and ECB moves on Thursday could see us slide again…
Idea of the Day-MQG
Macquarie is set for a bumper year…best since 2008 and the shares hit $100 in the past..I reckon after yesterdays upgrade the stock will continue to find friends..loads of IPOs ,capital raisings and corporate deals…what is not to like…at $58 they have had a big run but I think there is more to come…would be a buyer on any weakness for a rise above $60..maybe $63…anyway with momentum behind them it’s an easy one for punters to buy in a world of uncertainty..after all Investment banks like volatility…bread and butter..plus the lower Aussie helps with their US biz too…accumulate below $58..
Things to make me go mmmmm!!!
Saw that a baby born in 2015 will cost $541,000 to educate at a private school…of course they will live to be 150 so they will have plenty of time to repay their Uni degree which will cost another $200,000 .
How is it that the world’s richest 1% are worth more than 50% of the globe!!!
Have said this before but if you want to stem the tide of radicalism in disaffected youth , ensure they have jobs and a future!
Good to see that the Ukrainian ceasefire is doing so well!!!And now it looks like Yemen has become a failed state as a coup backed by Iran and Hizbollah seems to be in train..lovely…
Ze Germans have asked before for their ball back when they asked the Fed in the US for their gold back..in 2013 they only managed to get 5 tonnes..but in the last two months they had a real go and got back 85 tonnes to Frankfurt…can’t print that stuff…
Robert Allenby? Really? Malcolm Fraser moment perhaps?
18 out of 20 traders expect the ECB will announce a 600 billion euro sovereign QE program this week.
Chinese GDP scheduled for 1.00pm.The YoY outcome is forecast at 7.2% and the YTD YoY at 7.3%.
Good numbers from RIO today show good production numbers above our estimates which shows that despite low prices the answer seems to be just produce more…much like where the oils are doing now…Iron Ore one day, oil the next!
So many upcoming floats.. Amaysim is looking for proposals for handling the mobile service operator’s potential $400 million float.
Paddy says to Mick, I’m getting circumcised tomorrow,
Mick says I had that done when I was a few days old.
Paddy asks,” Does it Hurt?”
Mick says…”well I couldn’t walk for 18 months..
And a bonus cos I can….
Barack Hussein Obama, not feeling well and concerned about his mortality, goes to consult a Psychic about the date of his death. Closing her eyes and silently reaching into the realm of the future she finds the answer:
“You will die on a Jewish holiday.”
“Which one?”• Obama asks nervously.
“It doesn’t matter”, replied the psychic. “Whenever you die, it’ll be a Jewish holiday.”
Have a good Tuesday