Anyone wondering why the All Ords has taken another turn South this morning?

It could be because the Labor Carbon Tax will decimate the Australian business sector, BUT probably NOT!

Or, it could be because Labor will make up ground in opinion polls and may will the next election, BUT probably NOT!

NO, it's just the usual Aussie share market reaction, to movement in the US markets.

The DOW Futures markets started dropping again, a couple of hours ago and is now DOWn about 100 points and the OZ All Ords dropped about 40 points over the same timeline!

The Truth is, that the OZ markets are still heavily linked to what's happening in the USA and unless an agreement is announced in the US before the end of their Friday trading, in respect of the US Debt limit, then I suspect nerves may get the better of many players, as they bail out, prior to being rxposed this weekend!

So, NO AGREEMENT on the US DEBT LIMIT, may well mean heavy losses on the DOW today, followed in OZ on Monday?  

progressiveslol wrote on Jul 27^th, 2011 at 11:08pm:


What exactly do you think that proves, proglulz? Go on, please explain...

In a nutshell: The sharks on Wall St have basically eaten the E-traders alive and they are now starting to feast on each other. As a result, some of the best investors in the world are now hanging up the gloves. George Soros decided to walk away this week. His fund was down around 6% for the year and was only up 2% last year.

They realize that the glory days of 1980-2007 are far behind us now. The smartest guys in the room have basically come to the realization that there really is no sound fundamental strategy for making money on Wall St these days.

The way I see it, at the end of the day Congress will come up with some ridiculous deficit reduction bill that will allow us to continue this madness. It may happen after August 2nd but I believe it's going to get done. Don't be fooled into thinking it won't.

The only way I don't see it happening is because the idiots running the asylum in DC are starting to realize the only way to get something substantial done is to create a crisis like a debt downgrade. This would then give them the political cover to make the painful cuts that are needed to get the ratings agencies off our backs.

I don't see us going down that road. I fully expect a giant can kicking piece of crap bill that solves nothing. I then expect to see the ratings agencies downgrade the US in a matter of months. I suspect it won't be immediate because they are meeting with the S&P clowns on a daily basis.

The bottom line here folks is stay in cash and play small ball. I am extremely hedged here because this thing could swing in a variety of ways.

For the most part I would advise staying out of this mess. There are sharks everywhere and the government is desperate to keep the game going. I expect a large stock rally on any substantial debt agreement. I expect a lesser rally if we pass some BS deficit reduction bill that does nothing (which is what I expect).

If nothing gets done, the market is going to flat out free fall. I still believe we will be lower by the end of the year because we don't fix problems anymore in this world. We only delay them which only makes them worse.

I fully expect this house of cards to eventually come tumbling down. However, I remain convinced that we don't see this until the PIIGS of Europe have been butchered and cooked into pieces of ham and bacon.

Good luck out there.

Link -
http://seekingalpha.com/article/282623-default-or-not-beware-the-market?source=e...

astro_surf wrote on Jul 29^th, 2011 at 1:48pm:


Thats a "no" then is it, Progz? 

LONDON, July 29 (Reuters) - Britons remain reluctant to borrow and consumer confidence fell back in July towards an earlier two-year low, data showed on Friday, fuelling concerns that weak consumer spending will continue to hamper a fragile economic recovery.

The Bank of England said total lending to individuals rose by 0.4 billion pounds last month, compared to a 1.4 billion pound growth in May, as net mortgage lending fell by 0.1 billion pounds, confounding forecasts of a 1 billion pound rise.

Consumer credit increased by 0.4 billion pounds, slightly above economists' expectations.

"We think that this pick-up reflects the strains on consumers' finances rather than their confidence about the future," said Samuel Tombs, economist at Capital Economics.

The GfK NOP consumer confidence index dropped five points to -30, almost matching the two-year low of -31 hit in April, as the one-off boost from the festivities and the extra holiday for Britain's royal wedding faded. Economists had only expected a dip to -27.

MONEY SUPPLY

Retail sales fell at the fastest rate for a year in July, according to a survey published earlier this week by the Confederation of British Industry, and a number of British retailers, including fashion chain Jane Norman and retailer of alcoholic drinks Oddbins, have fallen into administration in recent months.

Britain's economy barely grew between April and June and business surveys have indicated manufacturers are facing a slowdown, banks are keeping credit tight as they repair their balance sheets and consumers are suffering the worst squeeze in income for 30 years on the back of soaring food and fuel prices, higher taxes and slow wage increases.

"Consumer desire to get a tighter grip on their finances ... is the consequence of an uncertain and somewhat worrying longer-term outlook for the economy and jobs, as the major fiscal squeeze increasingly kicks in," said Howard Archer, economist at IHS Global Insight.

On a more positive note, mortgage approvals numbered 48,421 in June, according to the BoE, up from 46,418 in May and the highest number since May 2010.

House prices also nudged up in July, according to mortgage lender Nationwide, although demand for homes remained sluggish.

"We doubt that the rise in the number of mortgage approvals in June marks the start of an upward trend in housing market activity," Tombs said. "The bigger picture is that approvals have barely moved in recent months."

Mortgage approvals are still running at half their long-term average, providing little hope that the housing market will pick up soon and boost the faltering economy.

The BoE's preferred gauge of money supply, M4 excluding intermediate and other financial corporations, fell 0.1 percent on the month after a 0.4 percent rise in May.

"The money supply data reflects concerns about consumer deleveraging. Quantitative easing was designed to boost monetary aggregates growth, and 15 months after the end of it money supply is contracting again," said Peter Dixon, economist at Commerzbank.

Link -
http://www.reuters.com/article/2011/07/29/britain-consumers-idUSL3E7IT2EG2011072...
===========================
As a comparison, both UK & OZ Consumers are wary of spending, both have Energy & Energy related Products hurting Disposable income and the UK actually has a higher inflation rate, which has been above 4% for all of 2011, whereas the OZ headline rate has just peeked above 3% for the first time.
http://www.rateinflation.com/inflation-rate/uk-historical-inflation-rate.php?form=ukir

Interestingly (pun intended), it is Australia where persistent noises are still heard about increasing interest rates, whereas the BOE chairman has made it clear that is not on the cards in the UK.  

The Truth is, any interest rate increase in the UK &/or OZ, in the near term, would have really adcerse outcomes!
 

perceptions_now wrote on Aug 2^nd, 2011 at 12:04am:


Looks like something may not be going quite according to plan?

The DOW dropped 135 points in 7 minutes, down to 12,055, before recovering some ground since, to now be at 12,110, down 33.

perceptions_now wrote on Aug 4^th, 2011 at 11:56pm:

U.S. Stocks Plunge in Biggest Retreat Since 2009

A global rout in equities drove the Standard & Poor’s 500 Index to its worst slump since February 2009, while two-year Treasury yields plunged to a record low amid concern the economy is weakening.

The S&P 500 tumbled 4.8 percent to 1,200.07 at 4 p.m. in New York. It has dropped 11 percent since July 22, the biggest loss over the same amount of time since March 2009.

Concern the global economy may relapse into a recession has driven investors out of stocks and into the relative safety of Treasuries, the Swiss franc and yen and is spurring speculation the Federal Reserve will start another stimulus program. The European Central Bank resumed bond purchases and offered banks more cash to stem the spread of the debt crisis.

‘Gloomy’
“The mood right now is gloomy,” Mike Ryan, the New York- based chief investment strategist at UBS Wealth Management Americas, said in a telephone interview. His firm oversees $774 billion. “The burden of proof is for better data that show the economy is not falling into recession. Tomorrow’s payroll report is crucial. If we see another disappointment, the stock market will have significant downside from here.”

Commerce Department data tomorrow may show U.S. employers added 85,000 jobs in July, according to the median economist estimate in a Bloomberg survey. In June, they added 18,000.

Link -
http://www.bloomberg.com/news/2011-08-04/yen-slumps-after-japan-intervenes-to-cu...
============================================
Well, things weren't looking all that good last night and the DOW had just hit 200 points down, just before I finished for the night.

But, with the DOW down 512 points on the close at 11,384, it is safe to say that the situation deteriorated considerably, with a fall of 4.31% for the days trading, which puts the DOW into negative for this calendar year, having started at 11,578 on January 1st, 2011!

All major European bourses were also down significantly -
FTSE 100 INDEX      5,393.14      -191.37      -3.43%      
CAC 40 INDEX          3,320.35      -134.59      -3.90%      
DAX INDEX               6,414.76      -225.83      -3.40%

And, with the European bourses closes hours before the US and the US continued to fall during those hours, it is safe to say that Europe will fall again, at their next session, unless a significant event intervenes.

It is also safe to say that Australian & Asian bourses will also have signifcant falls today, with Australian SPI200 Futures showing the way, currently down 157 & the Nikkei 225 Futures down 250.        

The OZ$ was also significantly impacted, declining to 1.0454, after starting the day at 1.0769, which is actually perverse, given the US bearing on these adverse Economic outcomes.

Btw, given US Population growth figures, their job figures really need to add around 150,000 per month, to tread water, so anything less is sending the Economy backward!

This is not a good week.

The net book value of A Hicks Inc has taken a considerable whack, I am worth well over $10k less now than I was on monday.