Morning,
The last day of the financial year brings a plethora of news..overnight the Italians destroyed any chance of a German bailout by beating them 2-1 in the Euro 2012 semis, and to cap it off for them both Italy and Spain emboldened by their football success appeared to withhold their approval of the new growth pact. I think last night’s dinner at the 19th summit was looking to descend into an all in food fight.
The US markets were deeply disappointed by economic news on the jobs front and only a final hour rally on hopes of a Zombie revival helped pull thing s up a tad…still finished down 25 with the VIX hovering around 20..still quite low considering.
Yesterday STO came out with what it said was not a cost blow out but the market took it as a huge one..bringing forward $2.5bn of spending on its Gladstone LNG project sent the shares reeling and despite the company trying to spin the news,it failed…cost blow outs are now the new black..anyone who has ever had a any building work done knows that this is just fact! Think it may be too soon to buy this one but starting to look a little more attractive after a 6% fall yesterday.(Research enclosed).
Metcash was another disappointment yesterday with a profit downgrade and a fund raising of $325m at 3.50 a 6% discount..they should be back soon and will get hurt..I suspect the whole market is cum a profit downgrade or cost blowout!..they seem to be taking turns…Analysts have been too bullish and the next round of profit results will show the extent of the slowdown and the loss of confidence due to Europe and China.
For those of you that are interested in how the new computer driven market works I will tell you a little story..yesterday I had some shares to sell in something that is a little illiquid..every time I put an order into the screen to sell some, a computer program would beat me to the market and undercut my price by a cent for a tiny amount of shares..the order from the computer was fractionally faster than mine so their order went in before mine..so here you have my operator sending a message to the exchange that is read by my competitors and then an order put on in front of mine undercutting me …they must have a faster server than mine..but I call it front running and I reckon the buyer was the same man…that’s called a false and misleading market and its happening everywhere! Love the ASX!
Things to make me go mmm.
1.The Banking scandal in the UK is getting bigger and will make the phone tapping scandal look like a cake walk…Barclays took it pretty badly last night wiping nearly 16% off its hare price..fixing the market is not a good look..fine of $450m hurts too… and this scandal will like a vortex drag many more into it…how can we trust these institutions any longer?..now there’s a question.
2.Rafael Nadal was beaten by 100 seed unknown at Wimbledon..David Beckham left out of GB Olympic Soccer team..travesty!
3.Blackberry get squashed as their very survival comes under scrutiny…they won’t have a new phone for another year..I suspect they will be in even more trouble by then..cutting 5000 jobs and posting a quarterly loss 5 times bigger than projected!Stock fell 22%..gone!
4.Newscorp officially announced that they were going to split into two..now the big questions emerge as to who will run the two halves..interesting times in the Death Star…may the force be with you!
5.Obama gets his healthcare package through the Supreme court..the hope that accompanied his election a few years ago has gone and his Presidency is such a disappointment..maybe this at least will be something he can say he did!
6.Once again our glorious Politicians have failed to sort out the boats coming to this Country…how many more people will die..it’s disgusting..put away Politics and sort it..we are all fed up with you!
7.Stockbrokers had their awards last night..there will be some hangovers this morning..but at least the computers will be fine..not sure what the industry has got to celebrate but a worthy cause for Charity..well done to this that organised it in tough economic times..tip of my hat to you..no hangover here..
And finally the US/Zombie Debt crisis explained
“Heidi is the proprietor of a bar in Detroit. She realizes that virtually all of her customers are unemployed alcoholics and, as such, can no longer afford to patronize her bar.
To solve this problem, she comes up with a new marketing plan that allows her customers to drink now, but pay later.
Heidi keeps track of the drinks consumed on a ledger (thereby granting the customers’ loans).
Word gets around about Heidi’s “drink now, pay later” marketing strategy and, as a result, increasing numbers of customers flood into Heidi’s bar. Soon she has the largest sales volume for any bar in Detroit …
By providing her customers freedom from immediate payment demands, Heidi gets no resistance when, at regular intervals, she substantially increases her prices for wine and beer, the most consumed beverages.
Consequently, Heidi’s gross sales volume increases massively.
A young and dynamic vice-president at the local bank recognizes that these customer debts constitute valuable future assets and increases Heidi’s borrowing limit.
He sees no reason for any undue concern, since he has the debts of the unemployed alcoholics as collateral!!!
At the bank’s corporate headquarters, expert traders figure a way to make huge commissions, and transform these customer loans into DRINK BONDS.
These “securities” then are bundled and traded on international securities markets.
Naive investors don’t really understand that the securities being sold to them as “AAA Secured Bonds” really are debts of unemployed alcoholics. Nevertheless, the bond prices continuously climb and the securities soon become the hottest-selling items for some of the nation’s leading brokerage houses.
One day, even though the bond prices still are climbing, a risk manager at the original local bank decides that the time has come to demand payment on the debts incurred by the drinkers at Heidi’s bar. He so informs Heidi.
Heidi then demands payment from her alcoholic patrons, but being unemployed alcoholics they cannot pay back their drinking debts.
Since Heidi cannot fulfil her loan obligations, she is forced into bankruptcy. The bar closes and Heidi’s 11 employees lose their jobs.
Overnight, DRINK BOND prices drop by 90%…
The collapsed bond asset value destroys the bank’s liquidity and prevents it from issuing new loans, thus freezing credit and economic activity in the community.
The suppliers of Heidi’s bar had granted her generous payment extensions and had invested their firms’ pension funds in the BOND securities.
They find they are now faced with having to write off her bad debt and with losing over 90% of the presumed value of the bonds.
Her wine supplier also claims bankruptcy, closing the doors on a family business that had endured for three generations; her beer supplier is taken over by a competitor, who immediately closes the local plant and lays off 150 workers.
Fortunately though, the bank, the brokerage houses and their respective executives are saved and bailed out by a multibillion dollar no-strings attached cash infusion from the government.
The funds required for this bailout are obtained by new taxes levied on employed, middle-class, non-drinkers who have never been in Heidi’s bar….
Now do you understand?” Simple!
Have a great weekend and Happy New Year!!!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.
The last day of the financial year brings a plethora of news..overnight the Italians destroyed any chance of a German bailout by beating them 2-1 in the Euro 2012 semis, and to cap it off for them both Italy and Spain emboldened by their football success appeared to withhold their approval of the new growth pact. I think last night’s dinner at the 19th summit was looking to descend into an all in food fight.
The US markets were deeply disappointed by economic news on the jobs front and only a final hour rally on hopes of a Zombie revival helped pull thing s up a tad…still finished down 25 with the VIX hovering around 20..still quite low considering.
Yesterday STO came out with what it said was not a cost blow out but the market took it as a huge one..bringing forward $2.5bn of spending on its Gladstone LNG project sent the shares reeling and despite the company trying to spin the news,it failed…cost blow outs are now the new black..anyone who has ever had a any building work done knows that this is just fact! Think it may be too soon to buy this one but starting to look a little more attractive after a 6% fall yesterday.(Research enclosed).
Metcash was another disappointment yesterday with a profit downgrade and a fund raising of $325m at 3.50 a 6% discount..they should be back soon and will get hurt..I suspect the whole market is cum a profit downgrade or cost blowout!..they seem to be taking turns…Analysts have been too bullish and the next round of profit results will show the extent of the slowdown and the loss of confidence due to Europe and China.
For those of you that are interested in how the new computer driven market works I will tell you a little story..yesterday I had some shares to sell in something that is a little illiquid..every time I put an order into the screen to sell some, a computer program would beat me to the market and undercut my price by a cent for a tiny amount of shares..the order from the computer was fractionally faster than mine so their order went in before mine..so here you have my operator sending a message to the exchange that is read by my competitors and then an order put on in front of mine undercutting me …they must have a faster server than mine..but I call it front running and I reckon the buyer was the same man…that’s called a false and misleading market and its happening everywhere! Love the ASX!
Things to make me go mmm.
1.The Banking scandal in the UK is getting bigger and will make the phone tapping scandal look like a cake walk…Barclays took it pretty badly last night wiping nearly 16% off its hare price..fixing the market is not a good look..fine of $450m hurts too… and this scandal will like a vortex drag many more into it…how can we trust these institutions any longer?..now there’s a question.
2.Rafael Nadal was beaten by 100 seed unknown at Wimbledon..David Beckham left out of GB Olympic Soccer team..travesty!
3.Blackberry get squashed as their very survival comes under scrutiny…they won’t have a new phone for another year..I suspect they will be in even more trouble by then..cutting 5000 jobs and posting a quarterly loss 5 times bigger than projected!Stock fell 22%..gone!
4.Newscorp officially announced that they were going to split into two..now the big questions emerge as to who will run the two halves..interesting times in the Death Star…may the force be with you!
5.Obama gets his healthcare package through the Supreme court..the hope that accompanied his election a few years ago has gone and his Presidency is such a disappointment..maybe this at least will be something he can say he did!
6.Once again our glorious Politicians have failed to sort out the boats coming to this Country…how many more people will die..it’s disgusting..put away Politics and sort it..we are all fed up with you!
7.Stockbrokers had their awards last night..there will be some hangovers this morning..but at least the computers will be fine..not sure what the industry has got to celebrate but a worthy cause for Charity..well done to this that organised it in tough economic times..tip of my hat to you..no hangover here..
And finally the US/Zombie Debt crisis explained
“Heidi is the proprietor of a bar in Detroit. She realizes that virtually all of her customers are unemployed alcoholics and, as such, can no longer afford to patronize her bar.
To solve this problem, she comes up with a new marketing plan that allows her customers to drink now, but pay later.
Heidi keeps track of the drinks consumed on a ledger (thereby granting the customers’ loans).
Word gets around about Heidi’s “drink now, pay later” marketing strategy and, as a result, increasing numbers of customers flood into Heidi’s bar. Soon she has the largest sales volume for any bar in Detroit …
By providing her customers freedom from immediate payment demands, Heidi gets no resistance when, at regular intervals, she substantially increases her prices for wine and beer, the most consumed beverages.
Consequently, Heidi’s gross sales volume increases massively.
A young and dynamic vice-president at the local bank recognizes that these customer debts constitute valuable future assets and increases Heidi’s borrowing limit.
He sees no reason for any undue concern, since he has the debts of the unemployed alcoholics as collateral!!!
At the bank’s corporate headquarters, expert traders figure a way to make huge commissions, and transform these customer loans into DRINK BONDS.
These “securities” then are bundled and traded on international securities markets.
Naive investors don’t really understand that the securities being sold to them as “AAA Secured Bonds” really are debts of unemployed alcoholics. Nevertheless, the bond prices continuously climb and the securities soon become the hottest-selling items for some of the nation’s leading brokerage houses.
One day, even though the bond prices still are climbing, a risk manager at the original local bank decides that the time has come to demand payment on the debts incurred by the drinkers at Heidi’s bar. He so informs Heidi.
Heidi then demands payment from her alcoholic patrons, but being unemployed alcoholics they cannot pay back their drinking debts.
Since Heidi cannot fulfil her loan obligations, she is forced into bankruptcy. The bar closes and Heidi’s 11 employees lose their jobs.
Overnight, DRINK BOND prices drop by 90%…
The collapsed bond asset value destroys the bank’s liquidity and prevents it from issuing new loans, thus freezing credit and economic activity in the community.
The suppliers of Heidi’s bar had granted her generous payment extensions and had invested their firms’ pension funds in the BOND securities.
They find they are now faced with having to write off her bad debt and with losing over 90% of the presumed value of the bonds.
Her wine supplier also claims bankruptcy, closing the doors on a family business that had endured for three generations; her beer supplier is taken over by a competitor, who immediately closes the local plant and lays off 150 workers.
Fortunately though, the bank, the brokerage houses and their respective executives are saved and bailed out by a multibillion dollar no-strings attached cash infusion from the government.
The funds required for this bailout are obtained by new taxes levied on employed, middle-class, non-drinkers who have never been in Heidi’s bar….
Now do you understand?” Simple!
Have a great weekend and Happy New Year!!!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.
