Morning sports fans 

Remember my email a few weeks ago about caution and insurance through puts…well so it came to pass…boy did it ever…NAB announced a $5.5bn rights issue too..

Yesterday saw carnage as everyone rushed to the exit at the same time.The banks and other financials went like lambs to the slaughter as someone shouted “Fire” and the stampede started..Now sometimes it is good to panic and rush lemming like for the exit and other times it is better to stay calm and access the situation.There is no doubt that the halcyon days on bank growth are sitting in the rear view mirror given current economic settings BUT is the party over completely ?Well we shall have to wait and see.The big four are still churning out huge profits ,huge dividend cheques and a huge yield.So they will  have a floor at some price.My rudimentary bank index of the bank four hit 212 and now is back to 185 of so..long way from the top..if you wanna rock and roll!Expect some more weakness as NAB have announced this moring that they are raising $5.5bn!!And demerging Clydesdale Bank and putting Ken Henry in as Chairman.He is a smart cookie..shame no one listened to him!Anyway the $5.5bn will suck a huge dollop of liquid funds out of the instos and giving them less fire power for the sector as a while so more weakness to come I expect.The banks are around 30% of the ASX 200..were a bit more so where they go the index will follow..
Good news though is Iron Ore..Joe called it…now above 60 a tonne and the dollar heading to 81 cents not such good news!
The elephant in the room is margin lending and CFD trading..lets face it the banks were a one way bet..and were so going to rally after the rate cut that everyone got set..and as with all crowded trades when the proverbial hits the fan it is smelly…there were possibly a lot of people hurt badly yesterday with margin calls and stop loss selling that didn’t help the situation. And to cap it all off last night Yellen (not screamin) came out with her latest stock valuation forecasts!The US economy seems to be slowing faster than anyone expected and the rate rise certainty may not be so if China is slowing,the US is slowing and Japan is going no where and Europe is only just registering a pulse have to ask yourself what the hell was the benefit of throwing huge amounts of borrowed money at the global economy…has it worked and if the globe is stalling why is the oil price going back up?Experts citing optimism on global growth…yet that is not what the numbers are saying or the IMF,EU,FED,PBOC,BOE,BOJ et al…har to make sense of it all sometimes…

So in the immortal words of Sir Mick
“What can a poor boy do ,’cept to sing in a rock and roll band!”

Idea of the Day.

STO hit 904 yesterday…energy shares the one broght spot in the sea of red..oh and maybe Iron Ore stocks..

BHP got the decree Nisi yesterday and is now heading for its settlement and the new entity Souths 32 to rise Phoenix like from the lawyers cluthes…should be interesting to watch and some believe that there will be a good opportunity to get into Souths at a good price when some sellers who are unable to hold have to liquidate..we shall see..

Things to make me go mmmmm!!!

Good to see Janet shooting the breeze with Christine about stock prices…”equity valuations are generally quite high and pose some dangers.”
Some profit taking in commodity markets ahead of Chinese trade numbers out tomorrow. .
In US economic data the ADP employment report showed 169,000 were created in April, below expectations of around 200,000.
Crude oil settled up 53 cents to $60.93 a barrel.
Few bits of data here today but the Budget is the big event…Domestic data today is the April employment report, scheduled for 11.30am. Expectations are calling for a modest jobs growth outcome of 4,000, compared to 37,700 last month.The unemployment rate is forecast to nudge higher to 6.2% from 6.1%.
Don’t you hate it when you start watching a great TV series..8 Seasons and the kids jump ahead of you and then want to watch the jumped ahead episodes..I am so confused…how did these people get here 

Have a great Thursday