You need to register separately on the Chart Forum
- see Chart Forum Help
Edit Profile Profile Help Help
Forum Rules Forum Rules Advanced Help/Instructions Advanced Help
Search Last 1|3|7 Days Latest Posts Latest Posts
Search Search Forum Tree View Tree View
   
ASX Stocks 20-minute delayed

Archive through June 07, 2010

Chart Forum » Hilarius' Hall Of Fame » Our Daily Bread » Archive through June 07, 2010

««  «  Previous  Next  »  »»


Author Message

Top of pagePrevious messageNext messageBottom of page Link to this message
skyhawk
Member
Username: skyhawk

Post Number: 15
Registered: 01-2004

Rating: N/A
Votes: 0


Thursday, June 03, 2010 - 09:03 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



I would have to agree with Rudy's comments here. The best of the
gains for ETF Gold have already been made at this juncture. Cycles
suggests the probability for further upside is limited.

At this stage I am looking for either 1/ A near term top on this ETF or 2/
a consolidation ( typically a sideways wave 4) before the final high
by approximately June 21st plus or minus a few days. Mind you,
that final high most likely will only be a marginal new high and a false break.

Cheers

Until cycles dictate another bullish opportunity ( perhaps later in the
year) I will stay out of ETF Gold.


Top of pagePrevious messageNext messageBottom of page Link to this message
rdumas
Member
Username: rdumas

Post Number: 3500
Registered: 11-2006

Rating: N/A
Votes: 0


Thursday, June 03, 2010 - 10:35 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Status of XJO Pattern

At this stage it would appear that we are in the process of forming an impulse wave. Unless the impulse wave extends (which is quite common) we should assume for the time being that it won't and we will form the 5th wave before moving into a corrective retracement of the impulse wave.

When attempting to determine the potential size of the 5th wave one should look at the normal Fibonacci relationships. One common relation ship is that the 5th wave will have a similar range to the first wave. Hence a sensible target to aim for initially is for the 5th wave range would be 101 points. As the termination level of the 4th wave was 4374 then we could expect the 5th wave to terminate somewhere near the level of 4475.

The following chart is a snapshot taken not long after market open.









I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

Top of pagePrevious messageNext messageBottom of page Link to this message
market_mad
Member
Username: market_mad

Post Number: 363
Registered: 09-2009

Rating: N/A
Votes: 0


Thursday, June 03, 2010 - 11:58 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Thanks for the comments Baysider!

There is good resistance around the 4485 area but if that is broken look out as we will be up to 4520 in a heartbeat.

I'm targeting 4600 over the coming week.

Cheers
MM


Top of pagePrevious messageNext messageBottom of page Link to this message
ody
Member
Username: ody

Post Number: 5091
Registered: 10-2006

Rating: N/A
Votes: 0


Thursday, June 03, 2010 - 12:13 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Interesting piece on Warren Buffett

And how he defends himself ...
-----------------------------------------------------------
From The Australian:

US house prices the ''granddaddy' of all bubbles, says Warren Buffett

Warren Buffett says he, along with most other Americans, missed the severity of the US housing bubble. Source: AP

BILLIONAIRE investor Warren Buffett says the run-up in US housing prices before the crash was "the granddaddy of all bubbles".

Mr Buffett told a panel investigating the financial crisis today that he, along with most other Americans, missed the severity of the bubble as the price of homes in the US rose and lending standards loosened through much of the past decade.

As it was happening, he told Berkshire shareholders that it was a "bubble-ette," he said. "But it was a four-star bubble."

Members of the Financial Crisis Inquiry Commission, meeting in New York to discuss the credibility of credit ratings, grilled Mr Buffett for more than two hours about his views of the crisis.

The bipartisan 10-member panel, created by Congress last year to examine the causes of the financial meltdown, had subpoenaed Mr Buffett to provide testimony.

Buffett, known as the "Oracle of Omaha" for his market insights, cited his own failure to grasp the extent of the housing bubble in explaining why ratings firm Moody's didn't bear special blame for the crisis.
Berkshire has been the largest shareholder in Moody's since it was spun off from Dun & Bradstreet more than a decade ago.

"They made the same mistake that 300 million other Americans made," said Mr Buffett, who said that "looking back," Moody's "should have recognised" the bubble.
But he said he didn't believe Moody's needed to replace management.

Berkshire has been selling its holdings in the ratings company for much of the past year. It owns 13 per cent of Moody's, according to a filing with securities regulators, but that's down from 17 per cent in July.

Mr Buffett's defence of Moody's -- his argument that it did nothing worse than anyone else who missed the housing bubble -- largely mirrored the stance he's taken on the company before. He made much the same point when a shareholder raised the topic at Berkshire's annual meeting last month.

Mr Buffett told the panel today, "Rising prices are a narcotic that affects reasoning power up and down the line."
Later, he acknowledged that ratings companies didn't do enough to adjust to a new reality as the housing market collapsed. "They tweaked their model when they should have gone at it with a meat axe," he said.

Moody's chief executive Raymond W. McDaniel, who sat alongside Mr Buffett during the hearing, acknowledged that Moody's "dramatically underestimated the significance of the downturn." His company was also subpoenaed to provide documents related to the role of credit ratings in the financial crisis.

The questions from the panel eventually ranged far from the subject of Moody's and the housing bubble. Mr Buffett fielded inquiries on derivatives, financial reform and compensation for executives at bailed-out companies.

Mr Buffett has famously called derivatives "weapons of mass destruction" but his Berkshire has sold some contracts and Mr Buffett objected to a proposal that would require his firm and others to put up collateral on existing agreements.

"I object to having one kind of contract and having it changed without getting paid," Mr Buffett said. But he said he supported the idea of imposing such collateral requirements in the future.

On executive pay, Mr Buffett said chief executives should have their compensation structured so their companies can reclaim the pay if the firms require government support.

"The CEO should basically go away broke, and I think his spouse should go away broke," Mr Buffett said. Board members at failed companies should also "bear heavy penalties."


Top of pagePrevious messageNext messageBottom of page Link to this message
ody
Member
Username: ody

Post Number: 5092
Registered: 10-2006

Rating: N/A
Votes: 0


Thursday, June 03, 2010 - 12:17 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



MM: I should have praised you, too, along with Rudy, for your reading of the market, and I am sorry I didn't. I suppose that is because I have been concentrating more intensely on Rudy's whole approach to these matters and his detailed explanations over some time. But clearly you are also astute in your analysis. Well done.


Top of pagePrevious messageNext messageBottom of page Link to this message
market_mad
Member
Username: market_mad

Post Number: 364
Registered: 09-2009

Rating: N/A
Votes: 0


Thursday, June 03, 2010 - 02:00 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Ody,

No need to be sorry mate. Always good to receive praise but my posts have been few and far between of late due to other commitments. Unlike Rudy of course who has been more detailed and consistent with his posts and who has called the market spot on once again.

Thanks again

Cheers
MM


Top of pagePrevious messageNext messageBottom of page Link to this message
rdumas
Member
Username: rdumas

Post Number: 3501
Registered: 11-2006

Rating: N/A
Votes: 0


Thursday, June 03, 2010 - 02:34 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi MM,

Are you riding your CFD right up to the top or playing the waves? I pulled out of STW at $42.60. It peaked today at $42.68 so I'm happy enough with that. If the impulse wave extends then it will mean that I pulled out too early and will have to write it off as a lost opportunity.




I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

Top of pagePrevious messageNext messageBottom of page Link to this message
ody
Member
Username: ody

Post Number: 5093
Registered: 10-2006

Rating: N/A
Votes: 0


Thursday, June 03, 2010 - 02:40 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Alan Kohler (from Business Spectator)
------------------------------------------------

The government's RSPT spin is a disgrace

The Business Council of Australia finally managed to squeak something about the Rudd government’s new mining tax yesterday, exactly a month after it was announced.

Why the BCA took so long to cough a mealy-mouthed statement about this disaster is a mystery, although it might have something to do with the fact that the Deputy Chairman of the BCA, Greig Gailey, is inside the tent – a member of the government’s five-person consultation panel.

It might also be that Australia’s top chief executives are frightened of a government that seems to be capable of almost anything, and just want to keep their heads down.

But the leaders of our most important industry are in complete uproar and have been for a month. They stand accused of lying and profiteering by the Prime Minister and Treasurer, and are promising to cancel billions in new projects, thus affecting every member of the BCA. Yet the main complaint of the nation’s peak business group’s is that the RSPT is not the “root and branch” tax reform that was promised, and that the BCA jolly well asked for in March.

Yesterday’s statement from the BCA added that the RSPT contradicts one of the BCA’s 'high-level' principles of tax reform: that any change should be prospective, not retrospective. It’s also worried about the 'perception' of increased sovereign risk. That’s it.

The fact that the RSPT applies to existing projects – the one element of the tax that the BCA chose to highlight – is actually the least of its problems for Australia.

If the tax applied only to future projects it would arguably be much worse because, as things stand, new developments are being cancelled and Australia’s future prosperity jeopardised, but at least there’s $9 billion in extra revenue to finance some infrastructure and a lowering of the company tax rate to 28 per cent.

An RSPT in its present form that only applied to future mines would potentially not raise a single dollar, because there wouldn’t be any future mines.

The worst thing about the RSPT was spelt out by KPMG in its report for the Minerals Council of Australia and released two days ago: the tax completely destroys the viability of new of nickel, gold and copper mines, and ruins it for iron ore and coal.

According to KPMG’s modelling, the application of the RSPT results in negative net present values for nickel, copper and gold mines, and it reduces the NPV for iron ore and coal projects by 46 per cent and 57 per cent respectively.

Another big accounting firm, Deloittes, has gone through ATO data and demonstrated that the effective tax rate for Australian mining companies (company tax plus royalties) is 41.3 per cent, compared with the average across all sectors of 27.18 per cent. I went into the ATO website and did the same calculation: it’s true.

In one of its taxpayer-funded advertisements, the government says: “Before the last boom Australia got 1 in every 3 dollars of mining profits in royalties and resource charges, we now receive just 1 in every 7 dollars.”

This statement is a disgrace, even leaving aside the fact that we are paying for it. Of course royalties have fallen as a percentage of profits as mines have grown in scale and efficiency – that’s why you have corporate income tax as well.

At 41.3 per cent, Australia’s effective tax rate is roughly average among global mining tax regimes – a bit more than most, but less than some. According to KPMG’s modelling the new average effective tax rate with the RSPT rises to 56.9 per cent for iron ore and above 50 per cent for all other minerals – clearly the highest in every case.

The government has explicitly acknowledged the need for competitive tax rates in reducing the overall company tax rate from 30 per cent to 28 per cent, but apparently this does not apply to mining – the industry on which much of our future prosperity will be based.

There are three parts to this disaster:

1. The fact that it would raise the effective tax rate to the world’s highest for mining projects and therefore curtail new development;

2. The way it was introduced with no consultation or warning, which has separately damaged Australia’s reputation among all global financiers as a stable, sensible place to do business;

3. And the way the government now seems to think it’s in a political battle with global mining leaders – a battle it can win through advertising spin and lies, as it usually does against political opponents. But these are people who make decisions based on arithmetic and risk, not emotion or public opinion.

As the managing director of Xstrata, Mick Davis, wrote in a letter to London’s Financial Times this morning (and it’s worth quoting at length):

“Australia's reputation as a stable regime for foreign investment has already been damaged and investments in Australian resources are at risk of being delayed or cancelled. The consequences will be borne by mining communities, prospective employees, superannuation funds, customers, service providers and suppliers, impacting on Australia's prosperity, particularly in resource-rich remote or rural locations.

“Resources are immovable but diversified mining companies have a choice of countries in which to invest. The government has shown itself willing to breach investors' trust and damage the economic case on which multi-billion dollar investments were made. In developing countries, we manage this risk by availing ourselves of fiscal stability agreements. Sovereign risk concerns about Australia may once have seemed absurd. Sadly, today they are foremost on every mining company board's agenda.

“The mooted risk of other countries following suit is largely overdone. No other country is considering imposing such a punitive tax on its mining industry. Australia's resource taxation will be isolated as the highest in the world at 57 per cent. Indeed, many resource-rich nations regard this tax as an opportunity to gain a larger share of global mining investment – unfortunately for Australia, it is.”

It is a huge miscalculation to think this letter and other similar statements by mining leaders are part of a “scare campaign” as Wayne Swan claimed this week.


Top of pagePrevious messageNext messageBottom of page Link to this message
market_mad
Member
Username: market_mad

Post Number: 365
Registered: 09-2009

Rating: N/A
Votes: 0


Thursday, June 03, 2010 - 02:58 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Rudy,

Yes, I'm riding it up. I too was tempted to take it off the table and lock in the profits but the price action to me seems pretty bullish - good volumes going through on the day and as long as we don't sell down into the close it could push up a bit from here. Given the FTSE was off last night I'm expecting them to come in with a bit of buyers appetite which may flow through into the US session tonight.

Cheers
MM


Top of pagePrevious messageNext messageBottom of page Link to this message
rdumas
Member
Username: rdumas

Post Number: 3502
Registered: 11-2006

Rating: N/A
Votes: 0


Thursday, June 03, 2010 - 03:05 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Reasons for taking profits today

There were 2 main reasons for me taking profits today.

The first reason was that we had completed a 5 wave impulse pattern. Now it is a fact that impulse waves can often extend (ie turn into a 9 or 13 wave pattern) however if it was complete then the following pattern would be a corrective pattern against the trend of the impulse wave.

One of the reasons why I thought this was a possibility was the pattern that was formed on the S&P500 last night.

We can see from the chart below that the S&P500 made a 3 wave move and that it achieved wave equality for its a and c waves. That is a common occurrence in 3 wave moves.





Just looking at the last 2 higher level waves in complete isolation from the rest of the price action, it looks to me like the S&P500 has formed the first 2 waves of a Flat pattern. I have labeled these two waves A and B. If I am correct then we should get a wave C that heads back down to around the 1070 level.

Even if it partly occurred then we would get the correction in the XJO that I have suggested in my previous comments.


I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

Top of pagePrevious messageNext messageBottom of page Link to this message
rdumas
Member
Username: rdumas

Post Number: 3503
Registered: 11-2006

Rating: N/A
Votes: 0


Thursday, June 03, 2010 - 03:07 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi MM,

The above response was in anticipation of you perhaps staying in for the complete ride up. If my reading is correct then I should get a better price to re-enter in the next day or two.


I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

Top of pagePrevious messageNext messageBottom of page Link to this message
rdumas
Member
Username: rdumas

Post Number: 3504
Registered: 11-2006

Rating: N/A
Votes: 0


Thursday, June 03, 2010 - 03:13 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi MM,

I would be very surprised if the XJO could close up much higher than the overhead resistance level drawn with the red line. That would be a sensible place for it to rest or turn down. If things were extremely bullish I suppose that it could get to the top of the next candle but I would think that unlikely.




I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

Top of pagePrevious messageNext messageBottom of page Link to this message
market_mad
Member
Username: market_mad

Post Number: 366
Registered: 09-2009

Rating: N/A
Votes: 0


Thursday, June 03, 2010 - 03:37 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Thanks Rudy,

I just closed out in response to your posts!

What area potentially would you look at to re-enter?

Cheers
MM


Top of pagePrevious messageNext messageBottom of page Link to this message
rdumas
Member
Username: rdumas

Post Number: 3505
Registered: 11-2006

Rating: N/A
Votes: 0


Thursday, June 03, 2010 - 03:44 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi MM,

Quite often the corrective retracement terminates somewhere near the termination level of the previous 4th wave so perhaps somewhere near the 4380 ~ 4400 level.


I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

Top of pagePrevious messageNext messageBottom of page Link to this message
market_mad
Member
Username: market_mad

Post Number: 367
Registered: 09-2009

Rating: N/A
Votes: 0


Thursday, June 03, 2010 - 04:02 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



That's interesting Rudy. I didn't expect it would potentially pull back that much.

Cheers
MM


Top of pagePrevious messageNext messageBottom of page Link to this message
rdumas
Member
Username: rdumas

Post Number: 3506
Registered: 11-2006

Rating: N/A
Votes: 0


Thursday, June 03, 2010 - 04:27 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi MM,

If the Flat pattern on the S&P500 plays out it could be more.

Now for the XJO I am expecting a higher level 3 wave move from the bottom to the top of the entire move. You may recall that my overall target was around the 4650 level. If I recall correctly your target level was even lower.

Keep in mind that the entire impulse wave on the XJO went from 4175.7 to 4489.1 = 313.4 points. The fact that we had an impulse wave for the first wave indicates that we have a Zigzag pattern in play.

If we retraced 23.6% of the entire move then we would go down to 4415.1 (you may recall I suggested a possible retrace to 4400). That would be the second wave of the Zigzag.

Now assume that the third wave of the Zigzag only went up 61.8% of the range of the first wave. That would be 193.7 points. Add 193.7 to 4415.1 and you get 4608.8.

That puts it in the ball park of my expected final target level of 4650 especially if the third wave went to the 78.6% Fib level of the first wave range. By the time we get to around the 19~21 June the rally may be losing some of its optimism and hence result in a slightly shorter wave for the third wave than we had for the first wave.

To me the pattern so far is playing to the script but there is a lot of time between now and the 19~21 June for the pattern to mutate.


I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

Top of pagePrevious messageNext messageBottom of page Link to this message
eagle
Member
Username: eagle

Post Number: 37
Registered: 02-2010

Rating: N/A
Votes: 0


Thursday, June 03, 2010 - 05:00 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Rudy - if I could ask/question from a learning perspective. Understand all that you say in your posts to MM - yet if I look back at your 3501 post - wave 1 has a higher peak just before it - is this allowed? And then if it is and is part of wave 1 then don't we have wave 4 overlapping with it. Or is that a false start (my terminology) and the wave 1 really starts on that Wednesday that you have it labelled (and hence we start from about 4265)?

As you've "forecast" so well on this impulse hope you don't mind the question. Your final number 4608 ties in very closely with the 50% F-retracement of the down leg from Apr 15 to May 21.

Thanks in advance.


Top of pagePrevious messageNext messageBottom of page Link to this message
ody
Member
Username: ody

Post Number: 5094
Registered: 10-2006

Rating: N/A
Votes: 0


Thursday, June 03, 2010 - 07:18 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



For anyone who is interested in economic and financial events outside share markets, Karen Maley is to my mind often compulsory reading. She is especially good on the European situation, as here. I realise that for the moment this does not count for much in rising markets, but eventually it will do, so one might as well stay informed while the party continues!
----------------------------------------
Karen Maley

Strange investing days indeed

The past 24 hours as seen something of a global disconnect, with US, Asian and Australian investors tossing aside nagging fears over the health of European credit markets and boldly wading back into equity markets.

The big question, of course, is whether investors are right in their new-found confidence that the increasing problems in European credit markets can be contained.

It’s now increasingly evident that the European banking system is facing a massive crisis of confidence, with the banks wary of lending to other banks because of fears their counterparties could have large exposures to the PIIGS (Portugal, Ireland, Italy, Greece and Spain).

Instead, banks are choosing to lodge their surplus cash with the European Central Bank, even though it pays a puny 0.25 per cent interest rate on deposits. As a result, the ECB now has $US380 billion parked in its 'deposit facility'– even more money than in the fearful days following the Lehman Brothers collapse in September 2008.

The lack of liquidity in interbank lending markets has been pushing banks’ short-term borrowing costs higher over recent weeks. And some analysts are warning that the situation is about to get a lot worse next month when the European banks are due to repay $US530 billion in special one-year loans from the ECB.

The trouble is that some European banks used their ECB loans – on which they paid a paltry 1 per cent interest rate– to buy up longer-dated eurozone bonds. The banks were particularly attracted to the PIIGS bonds, because these paid significantly higher interest rates than, say, French or German bonds.

The banks were then able to boost their profitability, and rebuild their balance sheets, by pocketing the difference between the two interest rates they received from the bonds, and the interest they paid on the ECB loan.

But the Greek debt crisis has ravaged the prices of the PIIGS bonds, leaving some European banks with heavy losses on their investments. Even worse, fears that some of the debt-laden eurozone countries may be forced to default on their borrowings have scared buyers away, making it extremely difficult for European banks to sell their bonds in order to repay their ECB loans.

Against this fretful backdrop, investors are increasingly anxious about whether debt-laden eurozone countries will be able to borrow the money they need to fund their budget deficits and to refinance loans that are due to mature. By the end of this year, Italy has to borrow an estimated $US300 billion, while Spain and Portugal will have to find around $90 billion and $20 billion respectively.

And investor confidence has not been helped by clear signs of increasing tensions at the top levels of the ECB. As part of the $1 trillion eurozone rescue package, the ECB broke a long-standing taboo against buying the debt of eurozone members. Bundesbank boss, Axel Weber, made little secret of his opposition to the decision.

Since then, Bundesbank disquiet over ECB policies has escalated. Earlier this week, the German publication Der Spiegel reported that as at the end of last week, the ECB had spent $50 billion buying bonds government bonds from Spain, Portugal, Ireland and, in particular, Greece.

According to the article, Bundesbank executives were puzzled as to why the ECB felt the need to spend so much money buying Greek bonds, particularly as the eurozone had already approved a $130 billion bailout package for Greece.

Some German central banks suspected that the Greek bonds purchases were part of a French conspiracy. By buying Greek bonds, the ECB was helping to prop up their prices. The French banks would then be able to offload their massive holdings of Greek bonds – and the French banks and insurance companies hold an estimated $100 billion of Greek bonds on their balance sheets – to the ECB at artificially high prices.

The German banks don’t benefit from the ECB’s policy because they’ve have promised German Finance Minister Wolfgang Schäuble to hold their Greek bonds until May 2013.

The Der Spiegel article pointed out that Deutsche Bank CEO Josef Ackermann had recently warned that the ECB itself could be jeopardised if Greece defaulted. The central bank would face heavy losses on its holdings of Greek debt, and may even need to be recapitalised.

But the past 24 hours has shown that investors outside Europe are eager to ignore the problems festering in the European banking system as they race to snap up beaten-down stocks. For the time being, at least.


Top of pagePrevious messageNext messageBottom of page Link to this message
ody
Member
Username: ody

Post Number: 5095
Registered: 10-2006

Rating: N/A
Votes: 0


Thursday, June 03, 2010 - 10:23 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Commodities:

There has been a significant decline, during the last few hours, in spot prices for base metals shown on Kitco.

Futures (Australia):

On Bloomberg the futures show the XJO up by 5 points.

Our dollar:

After showing some strength against the US$ the A$ is weakening again, though not (yet) strongly.

Wall Street futures:

Up, but not by a great deal.

(Much will obviously depend on how Wall Street will go overnight, but currently it does not look as though here in Oz we will get a great day. Of course, the day we have just had was VERY big.)


Top of pagePrevious messageNext messageBottom of page Link to this message
ody
Member
Username: ody

Post Number: 5096
Registered: 10-2006

Rating: N/A
Votes: 0


Thursday, June 03, 2010 - 10:49 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Marc Faber's writes in his latest report:

If, indeed, the Australian government increases taxes on the mining industry it will bring down new investments in the Australian mining industry below where they would have been had higher taxes not been imposed. And unless lower future investments in the mining industry in Australia are offset by higher investments elsewhere in the world, the potential supply of industrial commodities will diminish and bring about higher commodity prices than if no tax increases had taken place. And if all the countries of the world follow the "wise" measures of Australia's Rudd government and increase taxes and royalties on the mining industry everywhere around the world, fewer commodities will be produced at higher prices, which will hurt the consumer and result in lower tax revenues for governments and lower standards of living.
---------------------------------

In other words, Faber (a well known US economist who has predicted many things very correctly though not always with impeccable timing) is not greatly impressed by the wisdom of the government's policy. But then, as the PM is constantly telling us, if you oppose him (the PM) on this, you have of course been bribed by the miners. Or the Liberal Party - which means the miners, anyway, for the members of the Liberal Party, don't you know, are all in the pockets of the miners. (Rudd is seriously suggesting this.) Anything like an ARGUMENT against this statement by Faber will not be produced by members of the current Australian Labor Party.

I only recently noticed with interest that even Malcolm Fraser, though now in the eyes of some right-wingers a "leftie", considers Rudd's government as even worse than Whitlam's. And that, from an economic point of view, is really saying something - but clearly Fraser is right. Rudd's pronounced nationalising tendencies go right back to the fifties.

("Disclosure": I greatly admire much of Faber's thinking. But in any case, whether you generally agree with him or not (as I very often do), this statement, by itself, surely makes excellent sense, and draws attention to a point not often considered, as far as I have been able to see, in debates about this matter. Admittedly, in Australia the debate has often not been of a high standard, though good sense has been spoken by a number of people. Some of the commentators from overseas tend to look at the matter more dispassionately, but I haven't come across many who think the government has this issue right.)


Top of pagePrevious messageNext messageBottom of page Link to this message
ody
Member
Username: ody

Post Number: 5097
Registered: 10-2006

Rating: N/A
Votes: 0


Friday, June 04, 2010 - 01:52 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Around 1.00 am Adelaide time:

Base metals falling very badly on Kitco; futures for Australia down to zero.

And this situation might even worsen, as it has done over the past few hours, and despite the fact that Wall Street is not performing too badly (though so far not impressively).

In the case of resources one feels as though bearish sentiment is returning with a vengeance, and I read that this is probably related to new signs of diminished economic activity in China. There is clearly considerable concern. This plunge, if continued, will also harm our dollar further.

Incidentally, Swan is in China and under fire from Chinese miners - he does not seem to understand at all what he has got himself into there, i.e. that these miners are concerned about losing money in Australia as a result of his idiotic tax.

It would not now surprise me if tomorrow our market took a tumble again, after today's huge rise. We live in volatile times.


Top of pagePrevious messageNext messageBottom of page Link to this message
p3t3
Member
Username: p3t3

Post Number: 9
Registered: 04-2010

Rating: N/A
Votes: 0


Friday, June 04, 2010 - 03:21 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)




ody wrote on Friday, June 04, 2010 - 01:52 am:

Incidentally, Swan is in China and under fire from Chinese miners - he does not seem to understand at all what he has got himself into there, i.e. that these miners are concerned about losing money in Australia...



Hhmmmm. Sell mines to the Chinese in the midst of the GFC (like OZ Minerals, for instance), then tax the $**t out of them when prices recover. Now why would the Chinese be less than impressed with that, I wonder?

(Message edited by p3t3 on June 04, 2010)


Top of pagePrevious messageNext messageBottom of page Link to this message
jaded
Member
Username: jaded

Post Number: 203
Registered: 03-2010

Rating: N/A
Votes: 0


Friday, June 04, 2010 - 07:31 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)




ody wrote on Thursday, June 03, 2010 - 07:18 pm:

The trouble is that some European banks used their ECB loans – on which they paid a paltry 1 per cent interest rate– to buy up longer-dated eurozone bonds. The banks were particularly attracted to the PIIGS bonds, because these paid significantly higher interest rates than, say, French or German bonds.

The banks were then able to boost their profitability, and rebuild their balance sheets, by pocketing the difference between the two interest rates they received from the bonds, and the interest they paid on the ECB loan.




Have European Bankers all been educated in the Bond University Style?
Durh it's Arbitrage.Get the highest Interest Rate while paying the lowest.
This when they were being 'bailed out' from doing this exact same activity with US/Iceland etc 'bonds'.

Little wonder that Banks should be Nationalised if only we had much more enlightened bureaucrats but that'll never happen.

Arbitrage- Huge Money at 'guaranteed small gain' seems to work perfectly on paper and every bank is on to it instead of financing anything productive.

one should realise that government austerity measures usually involve the dropping/holding down the pay rates of public servants that include doctors,nurses,teachers as well as your general pen pushing 'fair game'.

as an aside,i wonder how much the Greek debt crisis goes back to the Olympics?China's problems too for that matter?

Could the Olympics bring on/contribute to the UK's demise?
I'm not very sporty,I don't see the Glamour and justification of huge expenditure on it.
Bit too Roman Circus Hoi Polloi Controller for me.


" Hear what you Say...
But see what you Do!"

Sir Zelman Cowen c 1970.

Top of pagePrevious messageNext messageBottom of page Link to this message
market_mad
Member
Username: market_mad

Post Number: 368
Registered: 09-2009

Rating: N/A
Votes: 0


Friday, June 04, 2010 - 08:11 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Jaded,

That's a very interesting point you bring up about the Olympics. I'd never thought about that connection before. Certainly the way things are looking for the UK and China right now, it would almost appear to be a poisoned chalice to get "given" the games.

Cheers
MM


Top of pagePrevious messageNext messageBottom of page Link to this message
ody
Member
Username: ody

Post Number: 5098
Registered: 10-2006

Rating: N/A
Votes: 0


Friday, June 04, 2010 - 09:37 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



(1) Olympics: yes, it is has indeed been the case that countries hosting the Olympics gained short-term, but lost longer-term. They pump a fortune in new buildings, do attract visitors, but once those are gone the expensive buildings still stand, but often to little purpose, while they still cost. Additionally, the many visitors usually don't return in a hurry, so tourism (on which the economy of Olympics largely depends) flourishes briefly, but then tends to go into decline. Indeed, jaded, this is a bread-and-circuses dating back to ancient Greece and Rome which is economically actually not a boon for countries for years after the evennt.

(2) Markets. Share markets in general went well, though Wall Street was less impressive than Europe. As against this, mineral commodities did very badly, and our futures are down, though not by much. I don't think Wall Street will be deeply inspiring, though some of the rises there do seem to be based on improving economic figures (though still based on monetary and fiscal policies, so we are not talking about real solidity or miracles here). Our market will probably look at other share markets on the one hand, and the worrying resources situation on the other. It is unlikely to go on making huge jumps. I'd expect a fairly "quiet" day as perhaps the most likely, but we could even see a slight decline. On the other hand, gold is down, which indicates that, worldwide, there is a degree of optimism currently - not, probably, so much about fundamentals (except some things in the US?) but notably about where share markets are heading. Globally, the rally still seems intact.


Top of pagePrevious messageNext messageBottom of page Link to this message
ody
Member
Username: ody

Post Number: 5099
Registered: 10-2006

Rating: N/A
Votes: 0


Friday, June 04, 2010 - 09:44 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Yet another warning about the RSPT from an important observer, but then, no doubt he is in the pockets of the mining industry. Similarly with the ANZ bank. Only Rudd knows what it good for us, and every one who disagrees is wrong,wrong,wrong, and receiving bribes from the miners.
-----------------------------------------------------------

Future Fund's Murray warns on RSPT, sovereign risk

By a staff reporter

Australia's resource super profits tax (RSPT) should be redesigned or abandoned, according to Future Fund chairman David Murray.

Speaking in a KBG TV interview, Mr Murray said applying the tax to existing projects, and not proposing to save any of the returns, was short-sighted and the structure needed to be changed.

"It's a long term tax being applied to a short term purpose," Mr Murray said.

"If we can't achieve a design that does not penalise the existing projects, that's a sovereign risk issue and a design that does not discriminate between recurrent spending and long term inter-generational wealth creation. If those things can't be done, the tax should be abandoned."

He says a portion of the returns should be put into sovereign wealth funds or inter-generational funds, or directed towards budget surpluses, rather than solely going toward recurrent spending.

The debate, Mr Murray says, has two parts: the design of the tax around the Australian Constitution, and its application to existing projects and associated sovereign risk concerns.

Australia had traditionally been considered reliable in terms of tax regimes, but the "public brawl" between miners and the government will reduce foreign investors' confidence in the country at a time when sovereign risk issues are taking on a larger importance on the global stage, Mr Murray said.

"Investors are becoming a little bit concerned whether governments will become more desperate and impose things that might...that they might not otherwise have done," he said.

"For Australia to do this now is not good timing."

Concerning the NBN and the Future Fund's 10 per cent stake in Telstra, Mr Murray says it is important the market receives some certainty surrounding a Telstra-NBN deal. He thinks a carefully designed arrangement could be a win/win situation for both companies.

The Future Fund was also considering supporting the Canadian pension funds' bid for toll road operator Transurban Ltd, but pulled out in March. Mr Murray says this is because the fund couldn't be tied up with commitments indefinitely, but he sees infrastructure as a good asset class which is providing a lot of opportunity, due to worldwide sovereign indebtedness.
--------------------------------------------------


Top of pagePrevious messageNext messageBottom of page Link to this message
ody
Member
Username: ody

Post Number: 5100
Registered: 10-2006

Rating: N/A
Votes: 0


Friday, June 04, 2010 - 09:52 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



The Overnight Report: Two In A Row
FNArena News - June 04 2010

By Greg Peel

The Dow closed up 5 points or 0.04% while the S&P gained 0.4% to 1102 and the Nasdaq shot up 1.0%.

It was the first time the Dow has put together two consecutive up-days since April, but more definitive strength in the broader market indicators helps overcome the fact 5 Dow points is hardly something to write home about. And it is the S&P 500 which provides Wall Street with its most robust indicator.

While the Dow has managed to bounce off the psychological 10,000 mark, we are now at a critical point for the S&P. Last night the index touched 1105 before settling back at 1102. While 1100 is a nice round number, 1105 currently represents the 200-day moving average. As the following graph shows, the 200MA has been acting as a support level until recently when a breach meant heightened fear and a VIX over 40. But now that we have consolidated somewhat, the 200MA becomes resistance. If the index can push through, Wall Street will breathe a big sigh. All things being equal, tonight's jobs number will be crucial.

Local economic data have been a bit lost in the wash of more macro global factors this past month or so, but as the situation in Europe is now tentatively stable the focus can return. And so it was that mixed data on both sides of the Atlantic last night were drivers of a choppy session – one in which the euro ultimately fell lower but Wall Street remained defiant.

With economists hoping for 500,000 new jobs to have been added in the US in May, the ADP private sector-only report released last night was a disappointment. Economists had expected 75,000 new jobs, but only 55,000 were registered.

Major US chain stores had mixed same-store sales results in May, albeit the net rise in sales of 2.6% was about in line with expectation. But given that the annual trend is currently 3.8%, the number was still generally disappointing.

April factory orders also missed the mark, with a 1.2% gain falling short of 1.7% expectation. Taking out volatile and lumpy aircraft orders meant a fall of 0.5%.

The ISM service sector index for May held steady at April's level of 55.4. This was considered a little downbeat given 56.2 was expected, but 55.4 is still expansionary and no slouch of a number.

It was lack of excitement in these numbers which had the Dow down 74 points at lunchtime. But the buyers were defiant, and the indices grafted their way to a positive close.

Over in the eurozone, economists had expected April retail sales to rise by 0.1% but they fell by 1.2%. The eurozone service sector index also came in a bit weaker than expected. So in a battle of the transatlantic economic data, the US won. The dollar index rose 0.5% to 87.23 and the euro fell 0.7% to US$1.2162 – again staring at previous lows.

Not helping the euro either was the EU's rejection of an appeal by Hungary to maintain a wider budget deficit. Now before you say “OMG, not Hungary too now!”, it must be noted that Hungary is an EU but not eurozone member, and that the former eastern bloc nation's deficit difficulties have long been a story even before the proverbial hit the fan in western Europe. Yet while it is not particularly “new news”, a nervous market is not going to wait around to find out.

The interesting point of last night's trade on Wall Street is that stock markets defied the euro slide, and moreover defied a turnaround 1% drop in the risk indicating euro-yen. A couple of weeks ago things would have been different. I think Wall Street is coming to realise that European authorities are happy to let the euro devalue but stand ready to cancel out excess volatility. A lower euro is better for European exports and thus budget deficit reduction.

Someone should tell that to the London base metal markets, because the headless chook commodity funds were simply playing “sell on dollar strength” last night and triggering more “technical” selling – quite violently so. There are no true physical market participants in the pit at present. Metals were hammered but found some recovery at the death. Copper, lead, nickel and zinc were down 2-4%.

The true market participants are nevertheless reticent to enter the market as we approach the seasonally weak demand period of the northern summer.

Gold also took a tumble last night on dollar strength. If Wall Street can rally while the euro is falling then weaker gold positions will be asking themselves “why am I here?”. Gold has struggled to overcome resistance at its previous highs so patience was lost last night and gold fell US$16.20 to US$1207.80/oz. Support lies above the US$1200 mark.

Oil nevertheless defied the dollar, rising US$1.75 to US$74.61/bbl. It was all about weekly inventory numbers which showed larger than expected falls in both crude and gasoline.

The Aussie should have by rights been lower over 24 hours on a weaker euro-dollar and euro-yen, and a stronger dollar index, but yesterday's surprise return to trade surplus in April meant the dollar is moderately higher at US$0.8446.

It's also worth noting that our big-name miners were down only slightly in US trade despite weaker commodity prices, and that Rio Tinto (RIO) was actually up 1% in London after yesterday's strong local market.

It is also worth noting that last night the VIX volatility index on the S&P 500 fell to 29. Numbers above 30 have historically indicated heightened fear.

The SPI Overnight fell 6 points.

Watch out for tonight's US jobs number.

Well that's it from me – I'm now off on a two week break which I think will involve a lot of sleeping. For the next fortnight the Overnight Report will be brought to you by our illustrious Editor, Rudi Filapek-Vandyck. Please behave yourselves while I'm gone.


Top of pagePrevious messageNext messageBottom of page Link to this message
rdumas
Member
Username: rdumas

Post Number: 3507
Registered: 11-2006

Rating: N/A
Votes: 0


Friday, June 04, 2010 - 09:55 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Eagle,

An excellent point that you raise. I have never considered the larger pattern of the move up from the 21st May as an impulse wave. I was quite sloppy in my explanation to MM late yesterday in my post 3506 because I did not account for that original wave that you mention in my explanation.

What I attempted to do was to tie up all of the elements of my analysis namely the price, time and pattern.

My final price was around the 4650 price level.

My final time was somewhere around the 21st June.

My final pattern was higher level 3 wave move.

In terms of time the first leg up was also a 3 wave move as shown in the chart/drawing below.



That wave A took from the 21st May and it possibly completed on the 3rd June. So we need a pattern that can complete in the time frame that I suggested.

We should now be very close to/or starting the wave B down and its completion should lead to the next rally leg up for wave C. The timing and the ratios appear to be in around about the right ratios to me at this stage. Again, these sort of corrective waves can get very complex and things can mutate at any time.

I will be out all day so won't be able to respond to any further questions until much later this afternoon. I hope the above explanation throws some light on things for you.


I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

Top of pagePrevious messageNext messageBottom of page Link to this message
peterloh
Member
Username: peterloh

Post Number: 3695
Registered: 03-2003

Rating: N/A
Votes: 0


Friday, June 04, 2010 - 12:25 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Ody,

The AWU is the greatest backer of the government proposed RSPT. Unions in general do a good job looking after their members.On this occasion if the union think that mining is such a good investment, they should stick their own money into it themselves instead of letting other investors taking the risk and they profit from the gain through the RSPT. The Singapore government has a back ground of trade unionism.They have approached things the right way, that is, they have accumulated capital and they have invested it right across the board with their investments. They made some good investment and some bad,
at least they backed their own belief.Here we also have our own industry funds, they can invest into mining themselves and profit from it directly if they think the risk is not that great and the profit justify it.

I am speaking as an investor and I do believe the way the government's approach currently is harmful to our country and instead of attracting investors here as a financial centre, it is more likely to drive them away from this wonderful country of ours. It is not a crime to make mistakes but the way we redress our mistakes in life is more important as it reflects our personal qualities.


-------------------------------------------------
Disclaimer: Please note that comments made in this column is mainly for the interpretation of charts in technical analysis. It is not made in my professional capacity and should not be taken as advice.In my professional capacity I am only allowed to give advice on certain managed funds authorised by my license dealer.Any share discuss is for general interest and should not be relied on to make an investment decision.It is likely that I may own the shares that we discussed as a trade or as an investment. Please consult your stock broker or financial adviser in regard to your personal situation.

The views expressed here contain information derived from public available sources that has not been independently verified.No representation or warranty is made as to the accuracy, completeness or reliability of the information.Any forward looking information in this representation has been prepared on the basis of a number of assumptions which may prove to be incorrect.It should not be relied upon as a recommendation or forecast by the writer.

Top of pagePrevious messageNext messageBottom of page Link to this message
cat_lady
Member
Username: cat_lady

Post Number: 699
Registered: 10-2006

Rating: N/A
Votes: 0


Friday, June 04, 2010 - 12:33 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



off market transfers
hi all
I'm intersted in transferring some of my shares from my personal account into our SMSF account. are there any tricks or traps I need to be aware of?
briefly I'm doing this as I'm gradually changing the nature of the external portfolio to a dividend rather than growth, while the SMSF could do with a few growth stocks.
thanks
cat lady


Without my morning coffee I might as well be a dog

Top of pagePrevious messageNext messageBottom of page Link to this message
breaker_1
Member
Username: breaker_1

Post Number: 189
Registered: 10-2009

Rating: N/A
Votes: 0


Friday, June 04, 2010 - 12:59 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



catlady

You can either sell and put the money into your SMSF taxable or get online forms from your broker i use etrade and transfer from one acc to the other [painfull]which means you wont be able to trade them for a while in transit maybe a week if your lucky.

I have done and it aint no barrel of monkeys


When one door closes another door opens; but we so often look so long and so regretfully upon the closed door, that we do not see the ones which open for us.

Alexander Graham Bell





Top of pagePrevious messageNext messageBottom of page Link to this message
p3t3
Member
Username: p3t3

Post Number: 10
Registered: 04-2010

Rating: N/A
Votes: 0


Friday, June 04, 2010 - 02:13 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)




cat_lady wrote on Friday, June 04, 2010 - 12:33 pm:

shares from my personal account into our SMSF account. are there any tricks or traps I need to be aware of?


I do this annually, within CommSec. Just fill in the form and ensure the $55 (or so) transfer fee is available - (seems a lot for just a couple of registry entries). Ensure the process is started in time for it to be included in the current financial year - usually around five working days.


Top of pagePrevious messageNext messageBottom of page Link to this message
ken
Member
Username: ken

Post Number: 660
Registered: 04-2003

Rating: N/A
Votes: 0


Friday, June 04, 2010 - 02:20 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Cat lady, p3t3,

Don't you have to pay 15% as an contributions tax? Make sure you have the cash to do that. I think this is known as an in-specie contribution - look it up on the ATO website perhaps. There may also be capital gains tax involved

Ken


Top of pagePrevious messageNext messageBottom of page Link to this message
p3t3
Member
Username: p3t3

Post Number: 11
Registered: 04-2010

Rating: N/A
Votes: 0


Friday, June 04, 2010 - 07:18 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)




ken wrote on Friday, June 04, 2010 - 02:20 pm:

Don't you have to pay 15% as an contributions tax? Make sure you have the cash to do that. I think this is known as an in-specie contribution - look it up on the ATO website perhaps. There may also be capital gains tax involved


Hello Ken

Yep correct, this is an in specie contribution; it is a realisation (disposal) of the share parcel and the transferor incurs any capital gains liability involved.

The contributions tax is paid as part of the SMSF's normal annual tax lodgement. And yes, the Fund needs to have sufficient cash to meet its tax obligations when they fall due - part of Trustee responsibilities (of which all Trustees are required to be up-to-speed when taking on a Trustee's role).

Pete


Top of pagePrevious messageNext messageBottom of page Link to this message
ody
Member
Username: ody

Post Number: 5101
Registered: 10-2006

Rating: N/A
Votes: 0


Saturday, June 05, 2010 - 12:26 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi cat lady,

First I'd like to confirm the correctness of what ken and p3t3 have said in their posts. You do have to pay capital gains on the in specie transfer as you are in essence selling the assets when you transfer them (sounds odd), but although you remain the owner in a way, you now hold them in a different place, and therefore have in effect sold them to "another place", where then the rules applicable to that place begin to work. Prior to that you have to pay a penalty, in the form of capital gains tax, as the owner that is quitting and will no longer have the assets in your own name.

The distinction between being an owner in your own right (which you were) and being an owner in the SMSF is quite vital, and the two must legally be kept carefully, and at all times, separate. Once the step is taken the assets are added within your super fund, and you then pay, within an accumulation fund, the tax rate that is applicable to that fund.

A major advantage is that the new tax is much smaller than the old tax. Another, I found, is that while I previously had to run my wife's money as a separate fund (which it was), I could, once the money was placed within the super fund, much more conveniently run the total package that resulted as though it was one "portfolio". As well, it became easier to quit a stock, as one paid less tax over it: indeed, in our case (as we are fully retired) no tax at all, which has made me the more successful as a "cut your losses quickly" person.

So did I think the tax bill worth paying? Certainly, because the money did, within the new environment, become much easier to manage, and I could do a better job than before. Ultimately the gain was easily worth the pain. You pay the capital gain tax just once, and ultimately you have to remember that if you kept the money outside the fund you would probably also at some stage have incurred capital gains tax. So we found it was worth "taking it on the chin". No regrets whatever - glad to be rid of the clumsy situation we had to deal with before.


Top of pagePrevious messageNext messageBottom of page Link to this message
ody
Member
Username: ody

Post Number: 5102
Registered: 10-2006

Rating: N/A
Votes: 0


Saturday, June 05, 2010 - 12:38 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Markets tanking

On Kitco base metals are falling in a big way at this moment.

Yet more interesting is the significant fall in Europe, and now the US. As far as I can see probably the major cause for the latest unrest is that fact that employment figures in the US have severely disappointed.

That does, of course, call into question the supposed recovery of the US, and if it were to be believed that that recovery (stimulus-led though it was anyway) is not in fact occurring, or at least much weaker than had of late been so comfortably assumed, then of course lack of confidence will spread worldwide. So far, in recent times, the US had been looking pretty good compared with Europe, and had been assessed as "first in first out" in the cycle, but that is now not looking so certain.

Combined with this there is of course ongoing fear about the Chinese housing market, and Chinese overheating on the one hand, with governmental clamping-down on the other.

So, with Europe continuing to get worse, as well, it will not be difficult for investors to decide not to move into share markets, or indeed to get out, unless they hold through thick and thin.


Top of pagePrevious messageNext messageBottom of page Link to this message
ody
Member
Username: ody

Post Number: 5103
Registered: 10-2006

Rating: N/A
Votes: 0


Saturday, June 05, 2010 - 10:27 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



A very bad fall on Wall Street

Down down by 3.15% to 9931.97; S&P500 by 3.44% to 1064.88, and the Nasdaq also down, by 3.64%.

If that is not a bearish move I don't know what is - and I have to say that, to my mind, it is in reality a much overdue fall. As many share market investors are in essence speculators who do not look at fundamentals - indeed, declare those to be irrelevant at all times and deliberately avoid being concerned with them, there are always periods when the market goes "in the wrong direction" from a fundamental point of view, but it is also true that in the end, whatever the psychology of investors, the fundamentals catch up. As Ben Graham insisted, much of the time the market is merely a voting machine - but not all the time.

And not so this time, I would venture to guess: it was confronted by a cold shower in the form of employment figures, not even mentioning many other economic facts around the world which are definitely going to have a negative economic impact.

It will be interesting to see whether this huge fall will be another fleeting deviation from what has continued to be in essence - again, of late - a bullish move up, or whether we shall now witness a more rational analysis of the price levels that stocks are at in relation to where they should be if the present-day, and to-be, economic factors are actually given some real attention, and comprehension (for a lack of understanding of economics among speculators is quite common, it not, indeed, typical).

I reproduce below the Saturday morning letter for Eureka subscribers from Alan Kohler. It has a number of interesting points. There are also sure to be interesting comments from others over the weekend.

The fall MUST be seen in context, of course: it cannot be seen as a fall from a constant level, and is in part reactive to what had become a rather enthusiastic market. It is too early to feel confident that more falls will follow - though one of this magnitude is not a good sign, unless there are a good many bulls who are hard of hearing.

The main trigger is the employment problem, at this point. There would also be many other worries once again being brought into play.

See Kohler's screed, which I believe is for the most part right.


----------------------------------------------------
Saturday, 5 June 2010

----------------------------
Week in View

By Alan Kohler
----------------------------

Wall Street Last Night

Dow Jones down 3.2%

* to 9931!!


S&P 500 down 3.4%

Nasdaq down 3.6%


Dow “clincher”

The Dow Jones has now gone below 10,000 for the third time. Many chartists will believe this means it will return to the lows of last March. Whether you believe in this sort of thing or think it’s voodoo, a lot of people believe it and trade on it.

At the very least, last night’s action, in which the Dow sliced through 10,000 like a hot knife through butter, means it will have a lot of trouble getting back above that level – as soon as it gets back above 10,000 it will get hit with a wave of selling.

Richard Russell, author of the Dow Theory Letter, talks about the May 7th low – that if both the Dow Jones and the Dow Transportation Average “violate” that, then that’s the “clincher” for a new bear market.

On that day the Dow closed at 10,380, and bottomed at 10,221. The Transportation Average had a May 7th low of 4243 and this morning sits at 4157.

If Russell is right, it’s the clincher. We’ll find out next week.

The trouble there is just no good news about; even the good news turns out to be bad. Let’s go through it all.


US Jobs

This morning’s news is US jobs: employment in May shot up by 431,000 and unemployment fell from 9.9 to 9.7 per cent. Yet the stockmarket has been absolutely smashed – down more than 3 per cent.

What’s going on? Well, 411,000 of those jobs were temporary hirings for the Census, which was being conducted across the US in May. State and local governments in the US actually laid off 22,000 people and private sector employment only grew by 41,000, versus consensus forecast of 180,000, and 218,000 extra jobs in April and 158,000 in March.

In other words, the US labour market has stalled.

Global investors are trying to watch three different circuses at once at the moment: America, Europe and China. Fair dinkum, you’ve got to have eyes in the side of your head as well as the back.

Your correspondent is dashing between big tops these days trying to watch all three of those circuses, as well as the RSPT circus at home, which only has clowns in it – no acrobats or lion tamers, just men with water pistol flowers on their lapels squirting each other and kicking each other in the bum.

Last night’s data was important because the prospects of the US economy gaining sufficient momentum to clear the credit turbulence depend on employment.

Subprime mortgages resets (where low honeymoon rates are put up to normal levels) will peak between now and November and there will be a second, higher, peak next year. Mortgage delinquency rates tend to improve in the first few months of every year before getting worse later, yet according to the Mortgage Bankers Association, total delinquencies surged to new record highs in the first quarter of this year.

Also the time is fast approaching when the US Government will have to pull in its horns and start dealing with the budget deficit. Debt as a percentage of GDP was 87.6 per cent in May and is predicted to be 93 per cent of total 2010 GDP across the year.

American will soon have to follow Europe into what might be called “premature austerity” – that is, having blown the budget trying to stimulate the economy out of recession they are forced to rein in spending before the recovery is self-sustaining.

In the US job creation has been ticking along nicely with 100,000 new jobs a month this year. One month’s data doesn’t necessarily mean the trend has reversed, but as you can see from the market’s performance this morning, it’s a worry.

And it doesn’t look like small business in the US is hiring. The National Federation of Independent Businesses this week said “the job creation picture is still bleak. Poor sales and uncertainty continue to hold back any commitments to growth, hiring or capital spending. Job creation plans have been running far below comparable quarters in the recovery from two other major recessions."

To sum up: the US economy wants to recover but the problem is debt, government, household and business. It’s called a hangover.


Hungary

The latest country to “do a Greece” is Hungary. CNN Money summed it up this morning with a nice headline – “Markets go on a Hungary strike”.

The Prime Minister Viktor Orban, sworn in just a few weeks ago, has taken one look at the nation’s books and declared that Hungary is broke and the previous administration has been lying about the figures. Default, he says, is likely.

The Hungarian forint dropped 2 per cent (that’s all?), the Euro slumped and credit default swap spreads blew out across the region.

Perhaps the reason the market’s reaction wasn’t worse is that Hungary has a current account surplus, and the budget deficit is only 4.5 per cent of GDP.

But the markets were spooked last night because it all sounds very Greek. Greece also lied about its fiscal position before entering a nightmare of begging for help while rioting in the streets.

Meanwhile Spain has had a horrible week as well. The central bank had to take over one savings bank, CajaSur, and impose drastic write-down rules on the others, and the Government pushed a 5 per cent cut in public service wages through Parliament by one vote. The nation is now divided, with 20 per cent (and rising) unemployment, and a collapsing real estate and construction sector which is threatening a banking crisis.

Each European country has its own unique misery; now Hungary has joined the ranks of unique unhappy families. As Leo Tolstoy began his novel Anna Karenina: “Happy families are all alike; unhappy families are all unhappy in their own way”.

The reason the Euro has been crunched this morning, even though Hungary is not a member of the EMU, is that its main creditors are European banks. Yet another headache for them.

And who’s going to bail them out this time when it all gets too much? Not only are the governments too broke to bail anyone out, they’re the problem debtors this time.

In many ways Britain is in the same boat as Spain, have enjoyed an illusory debt-based property boom that boosted incomes and which has now collapsed. The difference is that the Bank of England has managed to engineer a 20 per cent devaluation of the currency, which has restored competitiveness. Spain is in the euro and can’t do that, so it must cut wages and keep cutting them, but that risks a slow death by deflation.

The European Central Bank must now either allow a huge monetary reflation in Europe or allow the Monetary Union to break up – with Greece and Spain, at last, being removed, and possibly Ireland as well. As I have discussed before that would set up a chain-reaction in the banking system as devaluations in those countries destroy their bankers’ balance sheets.


China

Two days ago the Wall Street Journal carried an arresting article headed: "China's Property Market Freezes Up". The first paragraph said: “Government policy changes have thrown China's booming property market into a period of paralysis that some industry executives say will last for several months, weighing on global growth prospects already battered by the turmoil in Europe.”

This, plus the prospect of a recession in Europe and worries about the US recovery, is what is depressing commodity prices at the moment. An index of 18 industrial declined the most in May since October 2008, and the Journal of Commerce Industrial Price Index fell 57 per cent.

If you just looked at commodity prices, you’d say that a peak in global industrial growth had occurred, led by China.

Professor Michael Pettis of Beijing University, who writes a blog called China Financial Markets, wrote this week:

“As I have said many times before, I suspect we will see a lot of discontinuity in policymaking this year – amid lots of panicking – and recent events show just how. In the past few months Beijing seems to have become so worried about signs of overheating that, after trying unsuccessfully many times to pare growth carefully, it has given up the scalpel and has brought out the sledgehammer.

“Given the bad global environment, China’s huge domestic imbalances, and its out-of-control monetary condition, there are precious few tools Beijing has for fine-tuning growth. Instead policymakers are going to switch back and forth throughout the year between stomping on the accelerator and stomping on the brakes.”


But it seems a bit silly to me to be worrying about not enough growth in Europe and America and too much growth in China. Let’s not forget China has a balance sheet that is the envy of the world, including $US2.5 trillion in foreign exchange reserves.

Even if there is a real estate and banking crisis, China will not be like Spain: the Government has the capacity to absorb almost any amount of bank losses using its foreign reserves as collateral, although Japan stands as a warning about letting this get out of control.

But this looks like being a rocky year for commodity prices, and as a result, for the Australian sharemarket. It could well be one step forward; two steps back.

Having said, good valuations are starting to appear and as long as you have a long term focus the next few months could see some great opportunities.


RSPT

In the midst of all this uncertainty, with commodity prices falling, the Australian Government manages to get itself into an appalling fight with mining companies over taxation, and then just keeps flailing away as more and more heavyweights line up on the side of the miners.

Is David Murray, chairman of the Future Fund, using “scare tactics”? Or Rod Eddington, chairman of Infrastructure Australia? Or Mike Smith, chief executive of ANZ Bank? No, and nor are Marius Kloppers, Tom Albanese, Andrew Forrest, Mick Davis et al.

Kevin Rudd has made a dreadful mistake with the way he has gone about structuring and announcing this tax and he will be forced, eventually, to climb down.

Here’s what Citigroup’s London based mining analyst, Heath Jansen, said about it yesterday:

“The RSPT is likely to have a significant impact on the growth and returns for mining companies with assets in Australia. On new projects, it could wipe out one third of the incremental value. It could also drive uncertainty over implementation, and some prospective projects may remain just that.

“Mining projects are generally high margin projects to reflect the capex required and the increase in the effective tax rate to 57% has a significant impact on the economics. Arguably, mining is very different from oil projects as mining projects have a very large up front capital spend and cash flow over the life of mine of a project (which can be 20 to 25 years); in comparison, oil projects tend to have peak production for a short period of time, namely 4 to 5 years, which results in strong near term cash flows and higher NPV, before the assets go into a decline rate which can be 10 to 20% per annum.

“The RSPT may well result in 12 month delays to the projects – with Rio going to spend $US10 billion on the expansion to 330mtpa it will likely be very difficult for any board to sign off on the capex until the fiscal regime is known.

“Additionally, it is likely that the RSPT will only be an issue if the Labour Government wins power again in Australia. Given the impact the RSPT will have on their operations, we may see companies delaying projects pending the outcome of the election.”

I couldn’t put it any better.


Keynes

It’s John Maynard Keynes birthday today.

He was born on June 5th, 1883 and became one of the most influential people of the 20th century; his economic theories dominated the world from 1939 to 1979, until the monetarists, led by Friedman, and the Austrian School of Friedrich von Hayek, gained ascendancy through Margaret Thatcher and Ronald Reagan.

But the Global Financial Crisis has discredited free market ideas and led to rehabilitation of JM Keynes. Economists around the world have announced the death of monetarism and embraced the Government pump-priming that got the world out of the Great Depression, with Keynes as the script-writer.

So many happy returns ol’ Keynesie - we all love you again, or as Milton Friedman said, and Richard Nixon almost said, “We’re all Keynesians now”.

That’s until we have to pay back the debt of course – then we’re Antonios (The merchant of Venice, from whom Shylock demanded a pound of flesh).

Have a good one,

(By the way, nothing matters next week apart from what happens to the Dow)


Top of pagePrevious messageNext messageBottom of page Link to this message
cat_lady
Member
Username: cat_lady

Post Number: 700
Registered: 10-2006

Rating: N/A
Votes: 0


Saturday, June 05, 2010 - 12:02 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



off market transfers
hi all
thanks for all the responses. AFR also had a piece on this very topic! so I'm pretty well informed.
thanks again.

cheers
cat lady


Without my morning coffee I might as well be a dog

Top of pagePrevious messageNext messageBottom of page Link to this message
scarrie
Member
Username: scarrie

Post Number: 255
Registered: 08-2003

Rating: N/A
Votes: 0


Saturday, June 05, 2010 - 02:18 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi catlady,
The guidance above in relation to the transfer of shares into your SMSF is, in essence right but doesn't consider your personal cicumstances. I would add the following:
a. You will indeed be liable, as an individual, for any CGT liability incurred.
b. Whether or not there is a tax advantage in holding the shares in your SMSF, allthough seemingly an advantage for ody, may not be for you. Depends what marginal tax rate you are on as an individual.
c. The transfer will be regarded as a contribution to your fund. Whether or not 15% contributions tax is payable depends on whether it is a taxable or non-taxable contribution. Contributions tax is only payable if it is a taxable contribution, ie you as an individual are claiming the contribution as a tax deduction. Whether or not you can do that once again depends on your individual circumstances.
d. There are eligibilty requirements that need to be met to contribute to the fund.
e. There are annual limits which apply for taxable and non-taxable contributions which , if exceeded can result in heavy tax penalties.

If in doubt, seek some professional advice. Its worth the fee to avoid your fund being non-compliant.

Cheers
Dave


Top of pagePrevious messageNext messageBottom of page Link to this message
ody
Member
Username: ody

Post Number: 5104
Registered: 10-2006

Rating: N/A
Votes: 0


Saturday, June 05, 2010 - 02:49 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Cat lady, - SMSF contribution

I would assume, as scarrie suggests you should, that you will indeed check everything properly with an accountant. The best, actually, is one specialising in super - many that don't have only scant knowledge of the matter and at times give quite the wrong advice. We would not dream of running our super fund without the aid of a properly qualified specialist in compliance.

Just a comment on what scarrie says: it is not a matter of my tax situation "seemingly" being better than what it would be if the money was not in our super fund. We pay no tax whatever, including the money my wife put in at a late stage, and on which she paid considerably capital gains tax before, and, of course, when she did the in specie transfer.

I would also assume that you have ALREADY made sure that you will pay less tax in your super fund than you do outside it. I conclude this because otherwise (a) I cannot see why you would contemplate the transfer, and (b) I would imagine that in any case you pay tax well above 15% as your marginal tax rate. However, even the very fact that these assumptions could theoretically be wrong does show scarrie's point to be valid - just check it all out.

From what I do know about you, though, and given the fact that you want to put growth stocks in the super fund, I would say that the likelihood is that you will be doing the right thing. One thing, however, about stocks that pay high dividends. If those are franked - and indeed even if they are not - the dividends are themselves likely to be of much greater advantage to you in your super fund. Grossed up franking of fully franked dividends, for example, IN A FUND WITHIN WHICH YOU PAY *NO* TAX, adds another 43% to the amount which you get. But even if you do pay tax within your fund, you will almost certainly pay less tax there, on your dividends (franked or not) than you do outside the fund. Again, though, do check it out. And good luck with it all. I have no doubt that the general direction of your thought is right.


Top of pagePrevious messageNext messageBottom of page Link to this message
scarrie
Member
Username: scarrie

Post Number: 256
Registered: 08-2003

Rating: N/A
Votes: 0


Saturday, June 05, 2010 - 03:17 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi all,
Good points ody. I assume catlady would have considered those things but thought it worth while mentioning. Things like eligibility to contribute (given age and work status) and contribution limits if not considered could lead to some nasty surprises.

Cheers
Dave


Top of pagePrevious messageNext messageBottom of page Link to this message
cat_lady
Member
Username: cat_lady

Post Number: 701
Registered: 10-2006

Rating: N/A
Votes: 0


Sunday, June 06, 2010 - 08:11 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



hi all
will definitely be chatting with our accountant. he's very good, but it's just that I like to go into these conversations with some knowledge rather than appear a total doofus!
thanks again for the details responses.
cheers
cat lady


Without my morning coffee I might as well be a dog

Top of pagePrevious messageNext messageBottom of page Link to this message
tyche
Member
Username: tyche

Post Number: 69
Registered: 11-2003

Rating: N/A
Votes: 0


Sunday, June 06, 2010 - 08:35 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Timing is certainly the essence! I transferred all into my SMSF June 30 2007 and moved to pension phase a couple of months later. Paying the enormous capital gains tax bill hurt at the time, but not as much as the useless capital losses I have accumulated in the tax free entity since then.

(Message edited by tyche on June 06, 2010)


Top of pagePrevious messageNext messageBottom of page Link to this message
bridog
Member
Username: bridog

Post Number: 130
Registered: 06-2009

Rating: N/A
Votes: 0


Sunday, June 06, 2010 - 07:22 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Cat Lady,

You have probably had more advice than you know what to do with, but there is one possibility that has not been mentioned.

A few years ago I sold a unit on which some $25k was payable in CGT. First I made sure it was sold in July, thereby having the maximum time before the end of the financial year. Then I lived on the proceeds for the next year while salary sacrificing almost all my salary into super. Thus I turned the capital gains at marginal rates into 15% contributions tax and my income being a bit over $25k did not attract much tax.

Worked for me, but it would depend on individual circumstances.

Cheers


Top of pagePrevious messageNext messageBottom of page Link to this message
ody
Member
Username: ody

Post Number: 5105
Registered: 10-2006

Rating: N/A
Votes: 0


Monday, June 07, 2010 - 12:28 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Moving into bearish territory
----------------------------------------
US hedge funds dump Australian bank shares

* Scott Murdoch
* From: The Australian
* June 05, 2010 12:00AM

AUSTRALIA'S biggest banks have become the victims of aggressive international hedge funds, which are shorting the banks' stocks after growing concern about the strength of the domestic property market.

The top four banks have suffered a sustained selldown since April, as the US funds slash their exposure to the local financial services sector.

Westpac has experienced the most savage declines, with its share price down 19.4 per cent since early April, ahead of NAB's 15.5 per cent decline, CBA's 13.97 per cent fall and ANZ's 12.82 per cent depreciation.

The sell-off of the banks, combined with the negative sentiment towards the Australian mining industry because of the government's super-profits tax, has pushed the S&P/ASX200 down at least 8 per cent in the past month.

A New York hedge fund manager, who did not want to be named, said sentiment towards the Australian banks had soured because of doubts that the strength in the national property market would be sustained.

"There's a lot of scepticism in the US regarding the Australian property market," the hedge fund manager said.

"A lot of people have doubts about whether the strength of the market is going to be maintained.

"I think it's the case funds are shorting the banks. If you're of the view that property is going to come off, then shorting the stocks is a very clean way to express that view. It's an attractive trade."

Australian property prices have remained resilient, as capital city property prices rose 4.4 per cent in the first quarter of the year. However, new figures published by RP Data-Rismark this week show a weak 0.3 per cent increase in April. Economists were also surprised this week when new building commitments plunged by 14.8 per cent in April, outstripping the market's consensus for a 5 per cent decline.

The big four banks in Australia confirmed there had been an increase in the level of international trading in their stocks but downplayed the property connections.

The fall of the Australian dollar was thought to have prompted some of the overseas selling.

The banks' share prices have been under pressure since the recent reporting season in late April, when the chief executives warned of slowing earnings growth in the next 12 months.

The cash earnings of the majors rose, but there was pressure in individual businesses at each of the banks.

Westpac's Gail Kelly surprised the market when she said earnings growth would be difficult to maintain in the second half of the financial year.

Westpac is thought to have been targeted most heavily by hedge funds because of its large residential mortgage book, which has grown rapidly over the past two years.

CBA is understood to be least exposed to hedge fund investors compared with its three major rivals, primarily because of its large retail investor base.

However, several US long-only funds are thought to have sold out of the bank recently.


Top of pagePrevious messageNext messageBottom of page Link to this message
mastersl46
Member
Username: mastersl46

Post Number: 8
Registered: 06-2009

Rating: N/A
Votes: 0


Monday, June 07, 2010 - 02:52 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hello everybody in the stock market universe!!
Was looking at your chart rdumas & you seem to be on the right track.
What I see is that we are in a 2nd wave with Wave A being a 3 wave pattern. Should be support at 4300 and a B wave to follow,taking a week or a little longer. The C wave should push up to 4650 (4690 is around the 61% Fibo level). The timing may be a bit longer though than June 21 if you think of End of Financial year scenarios. Everybody is balancing their books until June 30
I had a dream the other night where I spoke to Jesus. Jesus said to me "Tell the people,thall shalt not short until July 2 !! hahahahahahaha.
So look for that date!! The US may turn early (around June 28,29). Expect a retracement to 10500 on the DOW but not as confident as getting that high. If anyone has a chart of the XJO, put a trendline connecting the top of Wave 3 & Wave 5 of the 3rd wave of Wave A near 4500 & see what date it hits when it hits 4650 (if anyone can see the trendline that far). Same for the US around 10300. This trendline may be retested & signal the end of the C Wave of the 2nd wave around June 30 , July 1 or 2.
Also I got some confidential secretive information from the Feds & they told me to watch for a potential crash between July 18 & July 27. Anybody reading this, I urge you not to be long around these dates. This message will save you alot of money!!
Only joking about Jesus & the Feds but the real story is in astrology, the planets & the stars!! July 2010 looks like a very downward month!! At least until July 23.
Of course I could be wrong????!!!!!!!
Waaaahhaaaaahhaaaaahhhaaaaahhhaaaaahhaaaaa!!!!!!


Top of pagePrevious messageNext messageBottom of page Link to this message
ody
Member
Username: ody

Post Number: 5106
Registered: 10-2006

Rating: N/A
Votes: 0


Monday, June 07, 2010 - 06:56 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Labor now likely to lose the election

See e.g. http://resources.news.com.au/files/2010/06/06/1225876/229028-newspoll-070610.pdf (if not visible, go to the website of The Australian to see the crucial poll on the tax specifically).

The latest polls show that even in many Labor seats "ordinary Australians" or "working families", as Rudd et al tend to refer condescendingly to those who don't belong to his bureaucratic clique, hostility towards his unwise new tax has grown to such an extent that he would currently lose the election. And, indeed, much of this hostility has grown greatly in the last few days as more and more people are beginning to understand - as was always likely would eventually happen - that his tax is unworkable and damaging to the country.

With this trend now firmly underway, it is only the more likely that it will strengthen, and that either Rudd will lose through his own pigheadedness (of which he has shown plenty), or that he will be sensible enough (from his own point of view) to buckle. Even if he does that, he may already be too late as he is now very widely seen as unsuitable to be PM, but he would then at least in theory still have a realistic chance.

It is not that people have warmed much to Tony Abbott: but Rudd is now widely perceived to be so bad that unless he changes this tax drastically or drops it he will very probably lose through his own doing.

Dennis Shanahan discusses the matter below. And believe me, when it comes to opinion polls, and to the most accurate judgement as to what will happen in cases like these, The Australian's record is far superior to that of any competitor. It is simply a fact that both Newspoll and The Australian's journalists are generally well ahead on issues like these.

Labor is particularly on the nose, in terms of changes against it, in Queensland, WA, and SA - all states where even Labor voters understand that their own (state) interests are under threat if this incompetent tax gets up. But in other states the problem is also increasingly seen for what it is.

The pragmatic attitude of Australians will eventually always reveal itself as dominant in their thinking, and their suspicion of unworldly and impractical ideologues runs very deep. This is the point to grasp in watching the current change in the country's attitude to Labor.

The first thing that people in this nation, whether Liberal or Labor, look for in selecting their leaders is practical common sense and competence - not ideology. For this reason, there is always an inherent suspicion of theoretical bureaucrats who, however "moral" they may seem, will not win if they are seen to be out of touch with reality and to be engaging in claptrap rhetoric.

The tax is not the only thing turning against Rudd, as Shanahan mentions: it is the main thing, but as he is also getting several other issues "wrong" those judging him now have abundant evidence of his incompetence in a variety of areas, not just one. He has misjudged matters to such an extent, and on so many issues, that his decline may now well in any case prove terminal, even if he changes course.

-------------------------------------------------
Labor must dig itself out now

* Dennis Shanahan
* From: The Australian
* June 07, 2010 12:00AM

KEVIN Rudd has to act, and act now on the proposed $12 billion mining tax or he's going to further damage the economy and destroy his government.

All of the polling, everywhere and on everything, is pointing to such a toxic attitude towards the Prime Minister and his government that he has to start solving the problems he can fix, or realistically face the threat of becoming a one-term government.

The weekend's events produced another snapshot of the government's problems.

Four illegal boat arrivals within the 48 hours of Friday and Saturday undermined the Prime Minister's claims that Labor's tough new actions would stop the boats. News emerged of new roofing insulation-related fires, highlighting the government's impotence over the botched $2.45bn scheme, and pressure continued over waste in the $16.2bn school building stimulus program.

These things are happening as polling has shown the government has already lost the fight on the new mining tax, and is suffering from its $38 million advertising campaign to counter the mining companies' ads.

Queensland, the seat of Rudd's electoral success, has turned against him, the ALP and the proposed resource super-profits tax and threatens to single-handedly turn the Rudd government into a historical oddity.

On the polling in this Newspoll survey and the Galaxy poll on the weekend, Labor could lose government based on Queensland seats alone, and seems set to not pick up a seat in Western Australia, as once hoped, but may lose two or three more.

That's without taking into consideration the possibility of three or four seats being lost in NSW, and now even a seat in Tasmania.

The mine companies' fear campaign and dubious claims and actions by some mining executives have undoubtedly caused unfair problems for the government, but when one of its principal economic advisers - Ross Garnaut - and the head of its Infrastructure Australia body (and Rio Tinto board executive) Rod Eddington, and the head of its own $61bn Future Fund, David Murray, all line up to call for a revamping or scrapping of the tax, it's much more than a dubious scare campaign.

It is also a greater tragedy for being an entirely legitimate aim to get more for Australia out of the resources boom mark II.

The government's plans have been ill-considered, ineptly handled and dangerously misunderstood.

There seems little Rudd can do about house fires and asylum-seekers but he can act to head off a policy and political juggernaut which has got out of control and needs to be brought back to sensible negotiation and face real change.

When one in four voters in nine Labor-held marginal seats say they are less likely to vote ALP at the next election because of the RSPT, Rudd has no choice but to act quickly and limit the damage or face inglorious defeat.

(Message edited by Ody on June 07, 2010)


Top of pagePrevious messageNext messageBottom of page Link to this message
ody
Member
Username: ody

Post Number: 5107
Registered: 10-2006

Rating: 
Votes: 3


Monday, June 07, 2010 - 07:14 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Some consequences of a possible change in Labor's attitude to its own tax

Should the unthinkable happen, and Rudd were to abandon his tax, there would be an immediate rally in a number of areas.

1. It is by no means certain that the electorate would reward him, but he just MAY stop or modify the rot for Labor.

2. Resources stocks and commodities would definitely turn around significantly, and the share market would regain at least some of its lost ground. Mining projects currently being mothballed etc would suddenly seem feasible again. The consequences would be drastic, not trivial.

3. Money departing from the country would no longer do so to the same extent, and indeed we might well - probably would - see an inflow. That would be so particularly if the tax were scrapped ENTIRELY. Just tinkering or "negotiating" will now no longer do enough, unless the negotiating were very real and very quickly to wipe out most of the damage caused by the tax. Probably distrust of Rudd is now so deep that so called "negotiations" will no longer save him, even if at all genuine in intent. So his best bet would be to buckle entirely. Expect him, in that case, to declare, that "we have listened to the people".

4. The Australian dollar, as it is a resources currency, would stop its slide and regain some ground (commensurate with the recovery in resources prices). Investment in gold would become less crucial to people (though it would not stop, as much weakness remains). Similarly the American dollar would no longer be quite as essential to have money in.

As for the dollar, our currency has lost far more ground than that of Canada as a result of the resources tax, and we might arguably move more towards the Canadian level in the recovery of our currency.

We must remember, though, that commodities will NOT remain unharmed, as their decline has also been caused by fears concerning China and Europe. However, the resources tax has been a very major factor in our overall economic/financial decline as a nation recently, and in our perceived prospects, so a sudden elimination of the resources tax would have a very profound - and very rapid - impact.

Take these considerations on board in thinking about your investments. I feel quite confident that I am not wrong on these issues, IF RUDD BUCKLES.


Top of pagePrevious messageNext messageBottom of page Link to this message
rdumas
Member
Username: rdumas

Post Number: 3508
Registered: 11-2006

Rating: N/A
Votes: 0


Monday, June 07, 2010 - 08:05 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Mastersl46,

I will share with you a chart that I sent out to my Weekend Market Wrap document readers yesterday. You will note that a particular cycle has been operating in the XJO for a number of months now where we form a top around the same time (give or take a few days).

On this basis we can expect another top in the XJO in the period of the 11~15 July which lines up with what you said in your post. The potential top of the 21st June on this basis would only be a smaller cycle top should it take place.



The cycle for the bottom is not as repeatable but gives a good enough indication to suggest that we will get a bottom in early August. This lines up with other forms of analysis that we do.







I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

Top of pagePrevious messageNext messageBottom of page Link to this message
rdumas
Member
Username: rdumas

Post Number: 3509
Registered: 11-2006

Rating: 
Votes: 1


Monday, June 07, 2010 - 09:57 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Ody,

I am in total agreement with you about the catalyst that will cause the materials sector to significantly bounce in the coming months. This is very much how the fundamentals affect the 'wave patterns' that eventuate in the markets.

It is because of this correspondence that accurate predictions in the share market will always tie in with world events. At this stage, I would suggest that this bounce will occur in this sector (and hence the overall market) in early August. I am not for one moment suggesting that the failure of Krudd's super profits tax will lead the global markets out of the current correction however, it will be one of many events that will 'conspire' to bring a momentary end to the severity of the current correction.


I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

 
Other Threads  
Last PosterPostsPagesLast Post
Our Daily Bread » Archive through August 20, 2010ody50 20-Aug-10  12:56 pm
Our Daily Bread » Archive through August 13, 2010ody50 13-Aug-10  01:34 pm
Our Daily Bread » Archive through August 09, 2010billt50 09-Aug-10  05:47 pm
Our Daily Bread » Archive through July 30, 2010ody50 30-Jul-10  11:47 pm
Our Daily Bread » Archive through July 18, 2010rdumas50 18-Jul-10  03:30 pm
Our Daily Bread » Archive through July 13, 2010eblode50 13-Jul-10  09:36 am
Our Daily Bread » Archive through July 08, 2010rdumas50 08-Jul-10  04:42 pm
Our Daily Bread » Archive through July 04, 2010bridog50 04-Jul-10  01:55 am
Our Daily Bread » Archive through June 30, 2010ody50 30-Jun-10  01:13 pm
Our Daily Bread » Archive through June 23, 2010rdumas50 23-Jun-10  09:16 am
Our Daily Bread » Archive through June 18, 2010eblode50 18-Jun-10  02:40 pm
Our Daily Bread » Archive through June 16, 2010ody50 16-Jun-10  04:11 am
Our Daily Bread » Archive through June 11, 2010rdumas50 11-Jun-10  10:34 am
Our Daily Bread » Archive through June 03, 2010rdumas50 03-Jun-10  08:13 am

Threads by Last Post Time:

First Previous 2 3 4 5 6 7 8 9 00 01 02 03 04 05 Next Last

Administration Administration   Log Out Log Out    

««  «  Previous  Next  »  »»