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Morning sports fans,

uncle sevens

“And I find it kind of funny
I find it kind of sad
The dreams in which I’m dying are the best I’ve ever had
I find it hard to tell you
‘Cause I find it hard to take
When people run in circles it’s a very very
Mad world
Mad world
Mad world
Mad world”

I think Tears for Fears summed it up beautifully. It is a mad world. Yesterday we got the long awaited and almost universally predicted rate cute of 25bps.The market reacted very positively and launched itself to be up 65 points (having been there once already) and then it reversed all engines and dropped in the space of ten minutes to be down 10.Really? Was this really investors and instos changing their minds or was it the computer trading systems gone mad. These systems read twitter feeds and Reuters headlines.Now I suspect that when the algos read that the easing bias statement seemed to have disappeared from the RBA statement I have no doubt that they switched from a 1 to a zero in true binary fashion and sold everything..actually you only have to sell the futures and let the Arbitrage programs do the rest.Simples!
The really scary thing is that the RBA seems to have shot itself well and truly in the foot with the Aussie Dollar actually rising ion this news. Not the plan at all Glenn!!! Anyway its early days to see whether this will encourage us to go out and spend ,spend, spend..the trouble is that only 1/3 of us have mortgages,1/3 own outright and the rest are self funded retirees..good luck with that..how about getting the banks to lower rates on business loans and credit cards rather than just mortgages.

Meanwhile the world fretted about Greece …again ..and the lack of a deal…there are some signs that the great risk trades of the last few years and the rise of bonds markets is starting to creak a little..the crowded trades are getting riskier by the day and the reaction in our banking stocks is evidence of that in spades..time to tread carefully..especially with another Jokin Joe Cigar moment looming next week!!!

US Bond yields rose in yield with the ten year note briefly at  2.22%, before settling at 2.19%., which followed gains in euro yields with the German 10 year bund climbing to 0.51%.

Idea of the Day

US crude topped $60 a barrel for the first time since Dec 11, 2014

Iron Ore up another 2.2% last night…more to come in BHP I reckon ..

On Friday the 24th I wrote about STO and how I thought there was an easy 5% from 790 to 820…well the stock has surpassed all my expectations for a rally and hit 880 yesterday..happy days for those that listened and held..nice to get one right every now and then.Maybe more to come here as well..

Things to make me go mmmmm!!!

Went to a interesting new IPO we are doing in the Health Supplements space..quality management and looks interesting…if you want to see the prospectus let me know.

There were moves from a few brokergage houses in Chna to tighten margin lending and guess what happened…yup down 4%..I wish I could find a way to short the China stock market..any ideas..it is going to implode one day(soon)!!A two week low and the biggest one day loss in nearly four months.

dummy spit

Last night as I was driving home late,found myself listening to Roger Montgomery on the radio.I am not usually a fanas he comes across as smug on TV..but on radio much better.The man talks some sense..here’s some mad world things to think about…80% of the IPOs this year in the US dont not have any earnings!!

He also suggested that you should never invest in a Chinese company listing in Australia. Agree wholeheartedly. No accounting standards and if so good why not list in China.Now doing more business than the US markets
He also talked about Classic Cars, Art and other yuppie trinkets (god this were the days my friend,we thought they would never end!).One example was MacBank selling off their art collection last week.(didn’t get my invite) and one painting with a 180,000 reserve went for 540,000!!!Thses guys are shrewd sellers and even shrewder buyers.

Other mad facts …in the US there is a company called Noodles and Co…serves Noodles..not even special ones at all…43 times earnings!!!Together with another one called Pop Cartz which makes sandwiches..they collectively have revenue of $2m and both listed…and bothe up 200% since listing…and bubbles are elsewhere..exclusive diamond encrysted iPhones,exclusive gold plated Cars…I mean really..half the world is starving!!

Good to see the Zombies raising their GDP forecasts for everywhere except Greece!!Still no sign of a resolution to the money go round for them.Asset sales are back on the block with rail and ports about to be sold to the highest bidder..usually the Germans,Russians or the Chinese!

Had a really interesting morning yesterday at a school in Sydney’s Eastern Suburbs where I was an ‘expert’ on a panel ,of far more experts in finance, talking to the year 11/12 kids about the world of money ,investing and the future. So nice to see so much enthusiasm and intelligence in one room. Should have left me out on the smarts basis but really exciting to talk macro issues and big themes.
My best point I think I made is that for the Generation of young men sitting in front of us they should not see Climate Change (yes it is real) as a threat alone. It is an opportunity!It really is…The game changer I talked about was the Tesla move into solar storage batteries…this could really start a revolution and help us with the renewables push..as an aside Labour in the UK has said they are going to take carbon out of electricity generation in the UK.200bn pounds to achieve that…the election on Thursday is shaping up as more than interesting to say the least.

The U.S. Trade Deficit for March came in much worse at -51.4bln v 41.5bln expected. The West Coast port strike is partly to blame as a surge in imports was seen in the report as container flows came back on.

Isn’t life tragic and bizarre sometimes…Dave Goldberg who was something of a tech whizz in the US dies after falling off his gym treadmill…the hand of fate is truly fickle…

I was watching a video clip of what is happening in Baltimore this morning …there was a young black guy standing and getting pepper sprayed by about a dozen police that then set upon him..now the TV station thought it would be a good idea to pixelate the word “Fuck” on his T shirt as that was obscene..happy to watch the violence unfold though..mad world!

And finally….

A woman was in bed with her lover when she heard her husband opening the front door.

‘Hurry,’ she said, ‘stand in the corner.’

She rubbed baby oil all over him,then dusted him with talcum powder.

‘Don’t move until I tell you,’she said. ‘Pretend you’re a statue.’

‘What’s this?’ the husband inquired as he entered the room.

‘Oh it’s a statue,’ she replied.

‘The Smiths bought one and I liked it so I got one for us, too.’

No more was said,not even when they went to bed.

Around 2 AM the husband got up,went to the kitchen and returned with a sandwich and a beer.

‘ Here,’ he said to the statue, ‘have this.

I stood like that for two days at the Smiths and nobody offered me a damned thing.’

Have a great Hump day



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