Thursday 5th July-God exists but market unimpressed..

Morning all,


News yesterday of the discovery of the Higgs Bosun particle was overshadowed by more fallout from the LIEBOR scandal in London…things were quiet overnight with the US closed for burgers and fireworks..the SPI was flat and Gold and Oil fell a little..as were base metals so maybe some backing and filling today.


Yesterday’s rally was nice to see but volume of $3.1bn was pathetic again..maybe we just have to get used to that in the brave new world! Concentrate on selling the big issues..I sold three yesterday in Pitt Street! Expect a sideways day today as we await the return of Wall Street.


Once again we saw some disappointing economic results from Zombieland with German services falling to under 50 which indicates a contraction and Chinese services also expanded at their slowest for 10 months.So the worse the numbers the more the Central banks will have to pump the economy..that’s the theory but let’s hope they have the will to do it.


Down to stocks-yesterday I sent round a note to clients on high yielders ..if you are interested I can send it again..otherwise as I wrote yesterday it may be time for poor old BHP to gather some friends..the stock has been trashed due to concerns that the Klop bought the US Gas business at completely the wrong price and would have to make write downs..well he did pay too much but I think it may be time to look at them as a recovery story as the oil price pushes back up..Brent back over 100 bucks..expect to see BHP closer to 35 in the coming week or so..


Things to make me go all Higgs Bosun.


1.Man Utd due to list…reminds me of the Myers float..looks like you get to have lunch with Jen Hawkins or Wayne Rooney but really you end up sleeping with a bloke called Malcolm.

2.Andy Murray wins to go through to semis…come on! Bringing out the POM in me. Even if he is Scottish!

3.AGO officially says that it won’t pay any Mining Tax casting some doubts on Government forecasts..suspect there will be very few that will pay any of the tax..these guys outmanoeuvred Julia big time…

4.ECB meeting tonight and hopes for an easing. Brazil looking to cut its rates..they are at a record low of 8.5%..traders expecting another 50bps off next week to help economy.

5.Big news in Fairfax press yesterday that they are moving from Microsoft to Google Apps..why was this news..not sure but shows the rise of the machine…Google and Apple continue to rub Microsofts nose in it.

6.James Packer looking to get more Echo..this one will be the subject of a takeover battle at some stage..there will be stories..maybe that mob in Newcastle could lob in a bid for this as they weren’t successful with DJ’s

7.IMF calls on the US to show fiscal restraint for next ten years and cuts in growth forecast..Debt to GDP now at 107%..which is not good..ask Greece!

8.DJs bid just keeps getting weirder and weirder with a small broker,ITG, in Melbourne responsible for most of the buying before the takeover announcement.

9.The Strange thing about the LIEBOR rate is the way it is set ..who would have thought they worked it out on an honour system..my word is my LIEBOR..clearly not!

10. US payrolls on Friday…

On the radio today..talking markets..Newcastle radio that is..Sky TV next week…

And finally….Two hunters are out in the woods when one of them collapses. He doesn’t seem to be breathing and his eyes are glazed. The other man pulls out his cell phone and calls emergency services. He gasps to the operator, “My friend is dead! What can I do?” The operator in a calm, soothing voice replies, “Take it easy. I can help. First, let’s make sure he’s dead.” There is a silence, then a shot is heard.
Back on the phone, the hunter says, “OK, now what?”

Clarence


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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.

Tuesday 3rd July-There's no other board like David Jones

Morning,

The farce that is DJS bid was revealed in all its glory yesterday..the company failed spectacularly to do any due diligence on the bidder..I mean even if you ‘Google earthed’ the address it would have started to ring alarm bells..the whole board should be sacked for incompetence..joke and makes a complete mockery of ASX and yet another reason why investors are staying away from this market in droves..In the US volatility is urging whilst volumes are the lowest in a decade....and most of that is computers!.

Here the computers are taking over trading and we are following the US model..I blame NASA...if these guys still built rockets and shuttles ,all the smart people would be doing something useful like putting a man on the moon,any man (although I can suggest a few), not rigging financial markets..the LIEBORGATE scandal in the UK is just another example of how the Masters of the Universe  are operating...the witch hunt will now be in full swing in the UK and more heads will be claimed..last night the Chairman of the World’s 4^th biggest bank resigned due to the scandal and expect more...This is going to be a big story...so much is priced off the LIEBOR rate it’s not funny and if you can fiddle this what else can be fiddled..even the Australian Bureau Of Statistics has now said that the unemployment rate is wrong.

This latest scandal from the UK comes after companies bought AAA ratings from the agencies for their dodgy CDS products...I mean why are we surprised about all this...they all have history..Morgan Stanley look to have been caught out on this in a recent revelation.

So what’s in store for our market..suspect a little buying will continue to creep up with commodities up a smidge and other equity markets slightly better..except US that is. Also Aussie dollar doing nicely nicely at nearly two month highs..I have suggested selling into rallies..still believe that is the case..range is 4000 to 4400 until otherwise notified...may be a while!

I talked about SBM yesterday and they promptly dropped 15%!...now may be the time to look at these babies ...I believe that around 1.50 you will be rewarded in time...

Things to make me go all Q and A!

1.Simon Sheikh fails to Get Up instead he falls down..thankfully he is ok..more than can be said for Sophie Mirabella’s credibility and reputation..Gone in 60 Seconds!

2.Another sad day with an Australia Special Forces soldier killed...our hearts are with the family.

3.US debt now $15 trillion dollars and 101.5% of GDP!!!If this goes on much longer pretty soon these guys are going to have a problem!!Biggest since WWII

Thanks to zerohedge.com for this insight..

4.NSW Government now looking at cutting 10,000 jobs from the Public service...sure they will all get reemployed in mining or at least as consultants to the Government doing the same job for more money but off the Govs books!

5.Microsoft hit with a $6.2bn writedown!! Slump in the value of its online services division...surprised ..not really...Google and Apple killing all before them!

6.Weak US manufacturing sector contracting in June for the first time since 2009.

7.LLC investor day looks like a prelude to a coming capital raising...

8.RBA meeting today will keep rates on hold...risk is less and economy needs to see the effect of the last RATE CUT..

9.Bob Diamond(Barclays Chief) threatens to tell all on regulators and Politicians..now that would be interesting!!

10.Craig Emmerson just embarrassing!!No more songs please on the new carbon tax...

If you are looking for an explanation of the Greek problem this is a very insightful take from John Clarke!!!Love this...John Clarke and Brian Dawes on the Greek Economy

There, I have not mentioned Zombieland once today...well nearly!!

And finally “The hardest thing in the world to understand is income taxes.” - Albert Einstein

Have a good day.

Monday 2nd July-Ole Ole Ole Ole!! And Lieborgate claims its first big victim!!

Morning all,


World markets have soared on news from the 19^th Zombie summit being slightly more decisive than the previous 18! It appears(and I mean appears) that Moaning Mertle has done an about-face…The moves were even more pronounced as end of quarter window dressing and a massive short squeeze pushed the Dow up 280…If anyone thinks that the latest moves from ‘Ze Germans’ will solve everything wrong with Zombieland, then they are sadly mistaken…however what it does show is the biggest problem is confidence..without confidence the whole financial system is a Emperor without any clothes..good to see the Greeks being the first to ask for the same deal as Spain!!Didn’t take them long did it!

The ASX 200 will blast off today…after a dramatic turnaround on Friday when news first spilled out of the Summit, we will push ahead..all risk assets rebounded with Gold and other commodities having a day in the Bollinger tent!

The question now is after the jump do you go with it or sell into it…personally I am not convinced and remain a seller of rallies..the range is 4000 -4400 on the SPI and so at 4150 (probably after today) there is maybe a little more upside than downside but I am not hoping for anything substantial or lasting until we head into the Autumn in the Northern Hemisphere…

On to stocks in our market..big resources will leap on moves on the LME and elsewhere and we may see a little more interest in the small ones with Gold stocks in demand…SBM may be worth a look after the big falls due to its merger with Allied Gold…at 1.80 I would be a buyer of this one…

Still remain a fan of BBG and expect some dodgy shelf company based in Macclesfield to send the Merchant of Bells a letter of intent to bid, on nice embossed stationary any time soon…nothing like it to flush a few players out..and so what if the company doesn’t exist just call it something Private Equity and Bob’s your father’s brother!

The next big issue that is going to hit markets s the US budget and if the two major parties can break the deadlock on funding it! That’s an issue only a month or so away! But let’s not worry about it just yet!

Things to make me go all Ole.

1.Spain win preferred debtor status..and the Euro Cup by beating Italy 4-0…been a good week for these guys!

2.DJS bid a farce..not sure why the board released the bid approach in the last days of the financial year ESPECIALLY when the letter arrived on May22nd!!!!…maybe helped rescue the share price(up 14%) but it won’t rescue their credibility…I am going to bid for BHP next week…seems easy..register a dud company and send the Board a letter…volia up they go..I am sure the bonus pool for management just went up too…the Fin Review even has a copy of the letter that EB Private Equity sent to DJS….I could just cut and paste..I mean really guys did you not do any due diligence yourselves!!!(Research piece enclosed)

3.Carbon Tax has started…the sky hasn’t fallen in yet…still find it weird that a tax designed to change our habits with energy use is then negated by giving compensation back to people …it’s like taxing Cigarettes and then giving smokers a rebate to keep them smoking!!

4.Diamonds aren’t a banks best friend…that’s two Diamonds now in troubkle..Jamie at JP Morgan and now Bob Diamond at Barclays for fixing the LIBOR rate! Chairman has now resigned and pressure will be on Bob to follow his lead..expect they will get a gig elsewhere though so don’t feel too bad for them…nice $450m fine!!Bank of England will be dragged in as well..Lieborgate!

5.Japan restarts a nuclear reactor…

6.VIX fear index drop 13.4% to 17…the World is now a safe place…SPI up 38 Gold up $45 and Oil up $7.. Spain’s 10-year yield fell 61 basis points to 6.33% …Italy’s 10-year yield fell 39 basis points to 5.81%.

7.RBS meets tomorrow but they will be on Hold especially now that all the Euro Trash have been bailed out!

8.Syria and Turkey continue to fall out.

9.Manufacturing data from China, the world’s biggest exporter, signal the government may need to add stimulus to arrest an economic slowdown that probably extended into a sixth quarter
.
10.Chinese Banks now account for a third of all World bank’s profits!! Eurozone banks accounted for 6 per cent of global profit last year, compared to 46 per cent five years ago and their 45 per cent share of global assets…that’s how much the World has changed!!!

Having watched “Too big to fail” last night I hope that it wasn’t too accurate because it certainly doesn’t show anyone in the Banking system in a good light and the consequences of that window of time will come back to haunt us.

And finally from Die Welt(German Newspaper)

When economic historians in a few years determine the turning point at which the euro zone turned into a debt community, they may refer to the last Thursday night. In those dramatic hours when Angela Merkel after massive pressure from Italian Prime Minister Mario Monti and Spanish Prime Minister Mariano Rajoy buckled – and agreed to an agreement whose scope is now very difficult to estimate.

Happy New Year!!



Clarence



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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.