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Archive through August 27, 2010

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gdd3
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Username: gdd3

Post Number: 977
Registered: 09-2002

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Friday, August 20, 2010 - 01:09 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)



Would your vote for the Greens? These extracts make for interesting reading!

1)....Andrew Bolt's Report...11th of August

Good morning Andrew

I see you are up bright & early for the papers; I am off to golf & will digest this in detail later. Thanks for passing this on to me as we are very concerned as to what they are up-to; see note from Chip on “Andrew Bolts Report 11 August”.

Below is also a review on the “mining tax” which I would like to pass-on to you. They will end up with zero taxes raised on this basis.

This is my view of the operation of the new mining tax.

It is an income tax of an additional 30% on the profits on miners of iron ore, coal, oil and gas both offshore and onshore of Australia.

This is additional to the current company income tax of 30% on total taxable income from mining of all resources and activities.

Obviously it would only be applicable to miners who are required to pay Australian Income tax on profit from the mining of the above commodities.

The kick in level for the mining tax is a minimum profit of $50M per year. The profit that will be taxed by this surcharge is profit derived in excess that rate of return above approx. 12% return. - 12% on what?

Unfortunately it does not say what the basis IS for calculating the 12%. Is it on net assets, gross assets or shareholders equity? How does the mine gate line effect these notions?

They further say that miners will not be taxed until they have recovered all capital costs attached to the mining operation.

Does this include the cost of acquiring a mining tenement?

Does this include the cost of establishing a freight process - rail or road existing outside the mine gate?

Does this include the cost of establishing a port facility outside the mine gate?

What if the freight process and the port facility are used by multiple unrelated parties?

There also has been some limited press on the matter of allowing the mining super tax to become a tax deduction in the year in which it is paid.

This then effects the real rate of tax to be 30% less (the tax deduction of the payment - 30% of 30% = 9%) given an effective rate of mining tax of 21% plus a little change for the payment timing differences.

Can't wait for the spin doctors to reveal the basis of the calculation - I suspect they haven't given it any thought - publically at least.

Profit seems to be LOOSLEY defined as the MINE GATE PROFIT.

Mine gate profit is the profit earned before the value added process begins. Thus iron ore for instance is mined in bulk and stored in bulk and could well contain elements of gold, silver, lead, silica etc. as well as the overburden. None of these additives attract the tax - it is only the iron ore content.

I have absolutely no idea how the amount of Fe contained in a bulk mine gate store could be measured - random sampling would be unfair given the disparity I have seen in the historic drill sampling results.

If iron ore is extracted at say 35% to 45% Fe, then it possibly has no mine gate value in excess of the mining cost (around USD $30 per ton). In this case there would be no super profit earned and so no mining tax to be imposed.

All the profit element is derived from the refining processes , and so as a value added tax this profit would attract no mining super tax.

I think the so called financial engineers will have a lot of fun!!!!








2)…………..“Unquote…. Also picked this up on the Greens:_




Subject: The Greens. Andrew Bolt Reports.
Devils inside hidden Green agenda

? By Andrew Bolt

? From: The Daily Telegraph

ONE election result is already clear - and makes this debate about Tony Abbott's "secret" plans even more brainless.

Wake up, people. The Greens will have the balance of power in the Senate.
Labour sealed that deal when it agreed to swap preferences with a party which its wiser heads know would devastate the economy if it could.
That's politics, I guess.
Winning is all, and to hell with the national interest. But how grotesquely irresponsible?
Labour is helping into power a party which demands we scrap our power stations and close industries that earn us at least $60 billion a year.
Oh, and it wants us all to have more holidays, because hard work and making money really sucks.
Some 12 per cent of voters say this is just the party for them, and even Labour now says it's the best of the rest.

Yes, that really is how infantile our society, and our politics especially, has become.

But Labour, whose primary vote has been unusually low, says this only because it badly needs Greens preferences.
In exchange, it's agreed to help the Greens save its own five Senate seats - and to probably win a couple more.
It was already inevitable Labour would win back some Senate seats from the Coalition.
But this deal also kisses goodbye to Family First Senator Steve Fielding, who lucked his seat in 2004 when Labour absentmindedly preferenced him but will lose it now Labour is steering votes to the Greens.
That will be all it takes. After this election, no government will be able to pass a law against the opposition's objection without the support of the Greens, and Greens alone.
Never has this party had such a great chance to inflict on us policies that many voters treat as position statements, rather than a deliberate manifesto for the deindustrialisation of our economy and the tribalising of our society.
This now is the real issue: How much of our future did Labour sell off just to get these Greens' preferences?
Never mind this week's scare campaign about what workplace laws Abbott might secretly plan. The hapless schmuck couldn't get them through a Greens-Labour Senate even if he wanted to.
No, what really needs debate is what the Greens might now demand from a Gillard Government in exchange for its vote. And that, in turn, needs journalists especially to take seriously this party's policies.
The Greens' manifesto is not written down for a joke. It is the serious work of ideological warriors hiding behind Bob Brown's amiable front.
Vote Greens in this election and you won't get cuddlier koalas, bigger hugs and cleaner rivers. In fact, you'll be voting to "transition from coal exports", which means ending a trade worth $55 billion a year .
You'll be voting to end "the mining and export of uranium", worth $900 billion a year. You'll be demanding farmers "remove as far as possible" all GM crops, which includes cotton worth about $1.3 billion a year.
You will be voting to close down many other industries, including export of woodchips from old-growth forests, certain kinds of fishing, oil and mineral exploration in wildernesses, and new coal mines.
You'll even be voting to close the Lucas Heights nuclear facility, even though it actually produces treatments for cancer.
In fact, you'll be voting for policies deliberately intended to make us poorer. Less industrialised. Or as the Greens' policy puts it, for a "reduction of Australia's use of natural resources to a level that is sustainable and socially just".
Maybe you think it won't matter if a few industries get shut. Maybe you really are that stupid. But you haven't heard the rest of the Greens' policies yet, have you?
You see, the Greens also plan to shut coal power stations that produce 80 per cent of our electricity. They not only "oppose the establishment of new coal-fired power stations" - claiming they make the planet dangerously hot - but intend to ban new coal supplies for those we already have. And they'll hit power stations with a new tax to make electricity too expensive for you.
Do you have any idea how many businesses would be driven broke by this Green frolic? How many hundreds of thousands of jobs would be lost?
If you think the Greens must have alternative power sources in mind, you're dreaming.
The Greens want to keep Labour’s ban on nuclear power. They even want to scrap government-funded research into carbon capture.
So consider. If the Greens get their way we'll have huge industries banned, businesses driven broke and power prices driven through the roof, with not enough electricity for what industries will be left.
So, with our income slashed to ribbons, what do the Greens propose? Not deep cuts in every government program but a spending spree to make Kevin Rudd seem a miser.
It's free money for everyone. If you vote for the Greens, you're voting for an extra week of holidays for all, "mandated shorter standard working hours", more pay for women workers, higher pay for casuals and better weekly benefits to students and artists.
More pay for less work, at the mere stroke of a Green pen. Isn't that a darling way to reorganise the economy? What could possibly go wrong?
They promise to lift foreign aid to "a minimum of 0.7 per cent of GDP by 2010", which means an instant rise in handouts of $4 billion a year.
Another $2 billion a year will go to scrap tertiary fees and forgiving all HECs debts.
The Greens lazily assume that the bill will be covered by hiking corporate taxes, plundering the richer 5 per cent of Australians with wealth taxes, and slugging air travellers. Show us your costings, Bob.
I'd be amazed if after a year or two of this that anyone would want to come to a country which by then would be a smoking hole in the ground.
Yet the Greens plan to do their best to attract more people to their new nation of freeloaders. Any "asylum seeker" making it here by boat would be freed into the community within 14 days, security checks permitting, and rewarded with benefits, medical services and school for children. These goodies will be offered to "environmental refugees", too.
A new, militant industrial agenda is also buried in this New Age madness, signalling the arrival in Brown's party of "watermelon Greens" - green outside and red inside.
These, like NSW candidate Lee Rhiannon, seem Green more of convenience than faith, using this doctors' wives party to smuggle in the kind of hard-Left politics that would scare voters if they saw it coming under a hammer and sickle.
This is what a vote for the Greens really means. And it's this party of vandals, tribalists and closet totalitarians that shameless Labour now helps to such threatening influence.. (Ends).

Green Tasmanian Senator Christine Milne recently stated on an ABC 7.30 Report: “We want to see a carbon price as quickly as possible because we want transformation of the whole economy and society”.





Subject: Fwd: The Australian. 14.08.10. All tax is expropriation by any other name







3).... All tax is expropriation by any other name

The mining tax is expropriation by any other name

? Exclusive: Andrew Forrest

? From:The Australian

? August 14, 2010 12:00AM


THE mining tax is no way to maximise the wealth of Australians.

The worst economic policy ever formulated in Australia's history, the Mining Super Tax Mark 1 (resource super-profits tax), was dropped like a bomb on the people of Australia.

Like any repugnant policy launched by government, it came complete with the propaganda package to sell it.

We all recall mining companies being called liars, foreigners and tax cheats, and the Australian people being told that the federal government, not the states, owned the resources, that these resources were about to run out, and all the rest of the community-dividing diatribe. It was a deliberate ambush to create a wave of sentiment against the resources sector, driven by government and union advertising.

In all quarters of the global capital markets the advertising fell on deaf ears. The government's move was seen as either incompetent or, far worse, dishonest. Such a massive move to the hard socialist Left should only have been the result of major and national consultation, certainly not an ambush without any discussion.

Among economic historians, the term "expropriation" was employed to describe the government's erratic behaviour. No doubt, adopting that term in this comment will lead to some hysterical reactions.

The term "expropriation" derives its meaning from the forced acquisition by government, normally below market value. The tax involved the acquisition of a 40 per cent economic interest by government of the entire mining and resources sector. The consideration offered was seemingly worthless promissory notes (the government's now infamous tax credit in failure or bankruptcy guarantee), that came with a substantially below-market rate of interest.

A promissory note of questionable value that no one understands? With an uncompetitive yield? In exchange for 40 per cent of the entire economics of the engine that saved Australia from the GFC. That's expropriation.

There is a dangerous irony in Kevin Rudd coming back. Rudd was already in the process of removing the RSPT when he himself was removed, allowing Julia Gillard to claim the credit. However, let's not forget Labor's and the Greens' original determination to introduce Mark 1. The surplus impact of this tax was rushed into the formal budget within days of its announcement. The Labor government was spending it before most people knew anything about its dreadful implications.

Now that Rudd is back and with the very strong support of the Greens (despite Bob Brown being fully aware of the devastation it would cause to the economy) this disastrous policy could be put back on the table. Like the secret Mark 2 deal, we can only wonder what the Greens-Labor preference deal contained.

Make no mistake, the Greens want this tax, and more, in complete ignorance of the necessity of a strong Australian economy.

Indeed, it was terrifying to see how the government, backed by the Greens, immediately returned Australia to a class-war scenario. The politics of envy was used in a crude attempt to wedge the electorate. Union and government advertising, funded through the misuse of so called "emergency powers", was mobilised even before the RSPT bomb was dropped. There never was any consultation with the mining industry.

Despite the Treasurer's (now seen to be ridiculous) claims at the time that he and the government consulted with the mining industry, they were in fact planning a co-ordinated government and union advertising campaign to cut down the very industry it was claiming to consult with. Investment in Australian resources immediately became woefully uncompetitive to global debt and equity providers the instant Mark 1 was announced. Suddenly the taxman was elevated ahead of debt service obligations, threatening the very capital that creates the profits in the first place. The underlying premise of the tax -- the government's guarantee, or promissory note, for 40 per cent of any project losses in the event of failure or bankruptcy -- was similarly immediately discredited by capital markets all around the world. While Australian banks have to tread carefully around government, they all unilaterally agreed the government's promises were as good as worthless, the tax was devoid of democratic logic and would severely disrupt the entire sector, knocking out the whole economy.

In an instant, debt financing became extremely difficult or impossible for all projects without extremely high rates of return. The Canadian Prime Minister joined other sovereign competitors to Australia in cheering our incompetence.

While the Mark 2 Super Tax may have modified the tax impost, like its original launch, the attempted defusing of the Mark 1 bomb has been shrouded in secrecy. It is an equally unfair proposal and the ability to model it, and in turn finance projects, remains debilitated by the lack of detail and transparency of the new arrangements.

We estimate that the marginal rate of tax has fallen from around 57 per cent (RSPT) to around 50 per cent (MRRT), but this remains a long way above the 40 per cent rate that is the next highest rate to be found anywhere else in the world.

The changes in the new tax are biased against infrastructure providers like Fortescue, who provide services to others, and so further handicap the market's ability to provide its own infrastructure. We'll become a nation that can't survive without the government teat. Also, Mark 2's debt finance benchmark advantages companies with large balance sheets, as opposed to start-up companies like Fortescue that rely on commercial finance to fund project and infrastructure development.

The government and the three multinational, multi-commodity resource companies negotiated a secret agreement that would absolve just those companies from paying much tax at all by way of Mark 2 for the foreseeable future. Those companies, and their associated industry representative bodies, were forced to sign secrecy agreements that prohibited them from discussing Mark 2 until after the election. Commentary with the media was banned. What could be so bad in that agreement with our government that the Australian people are not allowed to judge it until after they cast their votes?

The Mark 2 tax absolution is only enjoyed by those three in that secret room, via the capital shield provided by their respective large, long-established balance sheets and so called "mining rights". We calculate that this shield, properly and responsibly negotiated by the three global houses whose collective shareholders outnumber the members of all political parties, will effectively provide them, and them alone, a tax shelter of at least $100 billion.

How ironic! These are the same companies that bore the brunt of the government's liars, tax cheats and foreigners propaganda in their original advertising and attacks.

To make matters worse, we now have an uninformed market. Two of those companies continue to have their shares traded through the Australian Securities Exchange while they are signatories to an agreement not seen by 317 of their peer companies. Other mining companies produced humorous business cards at the time that nominated the CEOs of the three multinationals as "Unelected Directors" of their own companies.

This secret deal put in place the so called "transitional arrangements".

While the big three have been placated, the rest of the mining industry impacted by the tax, and in particular those that need to attract investment and financing for future projects, have been left carrying the burden of Mark 2 -- and its $10.5bn annual tax collection target. This is the remaining 99 per cent of companies affected by the tax. The multinational, multi-commodity companies are protected while home-grown Australian companies developing Australian assets for Australians are both penalised and exposed.

Does this sound like a fair, broad-based and simple tax to you?

With the Mining Super Tax Mark 2, we have a new tax that does not target non-renewable resources -- just iron ore and coal -- and protects just the privileged 1 per cent who were in those secret negotiations. It is a totally discriminatory tax and much more complicated than the system it was promoted as replacing.

Further, within the iron ore and coal industries, it will fall predominantly on the existing junior and mid-cap miners and all hopeful new entrants. In other words, it is likely to be hopelessly inefficient and will deter new investment while leaving the existing bigger companies largely unaffected.

Why would a government create an environment that discourages entrepreneurial risk by Australians seeking to have a go, in favour of established global behemoths? It can only lead to lessening competition and dampening the entrepreneurial Australian spirit.

A similar tax was brought into Papua New Guinea by the same people who supported this tax, only decades ago. It didn't raise a cent over all that time, but did successfully and efficiently deter investment. Unsurprisingly it was thrown out, but not before it cruelled investment in that country.

It's no surprise that since Papua New Guinea threw out its own Mark 2 mining super tax, international investment has been flowing back in and new project developments are flourishing.

In the face of that raw example, why on earth would any responsible political leader burden Australia with it now?

Further, if those involved in Canberra's taxation theory had ever exercised the maxim of "you have to get out to find out", they would find that at least in magnetite and hematite iron ores, Australia's deposits could accommodate demand for hundreds of years, definitely not "about to run out".

The sector is, and always has been, capital deficient; it has never been resource constrained.

As a country, we have great people and huge and growing resources. Why would any responsible government introduce a new tax that further impairs our inherent capital deficiency to utilise our people and our growing resources? Worse, the government is claiming that $10.5bn will be raised in 2012-13, but resource analysts simply can't reconcile those figures with their modelling of the tax impost on the big three. The most likely explanation is that in the first instance the government didn't understand how damaging the proposed tax would be.

Now it simply doesn't understand the extent of the concessions it has granted. Such was the desperation to clear the decks for an early election, to exploit a predictable honeymoon period of the new Prime Minister.

While the exact amount likely to be raised by the new tax is debatable, what is not in dispute is the creation of a new layer of complex taxation and a raft of legislation. This will take the weight of the dead hand of bureaucracy up another notch in an industry that already struggles to deal with myriad regulations. Most worryingly, the tax represents an attempt at redistribution of wealth in complete disregard of the impact on the underlying activity that is required to generate such prosperity. Remember the goose and the golden egg?

The Super Tax Mark 2 (MRRT), just like the Super Tax Mark 1 (RSPT), should not be part of any responsible government approach to maximising the wealth of all Australians. Proper tax reform is simple, broad based and enjoys wide consultation. In stark contrast, the MRRT is complex, discriminatory and narrowly focused. I ask on behalf of all in the resources sector that Mark 2, like Mark 1, be abandoned and if a replacement tax is required, it be achieved through a national consultative process.

Australia, a capital-starved country, must bring in policy to rejoin itself to a reputation of responsible economic leadership. After all, there has never been a country that has taxed its way to prosperity.

We are a nation of bright, hard-working people and we enjoy huge and unexploited resources that grow with every day of exploration.

We must ensure that whoever wins on August 21 know that they have no mandate to continue this ready-fire-aim syndrome currently plaguing national taxation policy, to the detriment of every single Australian.

Andrew Forrest is the founder and chief executive of Fortescue Metals Group

Ron's Remarks:



Andrew Forrest is far too gentle with the jackals and vultures that populate the Canberra Kremlin and the tax office.



None of these pests have ever produced anything. All they understand is lying in wait for a defenceless victim to overwhelm. The disgraceful hounding of Paul Hogan is another example of their mode of operation.



A million Australians are already working overseas to avoid these vicious pests.



The tax is nothing more than a poorly thought out plan to claw back the billions wasted by Labor and to stay in power courtesy of a secret pact with the Greens.
}

So What do you think?
Dolphin


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eblode
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Friday, August 20, 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)



Rudy,

l'm certain that Abbott will win. It's been a fun election but tomorrow it gets serious. So say bye,bye Julia and welcome home Tony.

Eugenio







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rdumas
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Friday, August 20, 2010 - 03:06 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 Eugenio,

If you are really so sure then you can get yourself a guaranteed $175,000 for a measly $100,000 by tomorrow night.





Or did you already do that and bring the price in from $3.30.


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

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rdumas
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Friday, August 20, 2010 - 03:10 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,

Looks like the money is starting to come in for the Coalition. An astute punter could have put some money on the Coalition months a few weeks ago at around the $4.00 and then put a bet on Labour sometime tomorrow so that they could make money no matter who wins.


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

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billt
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Friday, August 20, 2010 - 03:32 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)



REDUCING THE DEBT


Considering that Sovereign Debt will be the international issue for decades to come, it is comforting that here in Australia our Debt as a percentage of GDP is forecast at just over 6% under the Labor Party Budget & Election promises.

The Coalition propose to bring that down to 4.5%.

The DEBT by 2013/14 will be:

LABOR $87b

COALITION $56b

However, if GDP reduces from that forecast, we all know that Revenues will be drastically reduced, and this Debt level might grow well above these figures.

Assuming you wanted to cut the Coalition Debt to zero by 2013/14, what would you delete from the Liberal Parties Budget Costings to achieve the reduction (see attached Horwath 18 August 10 Report)

http://www.liberal.org.au/~/media/Files/Policies%20and%20Media/Economy/Australia s%20Future%20Policy.ashx

1. Labor’s Stimulus Spending in next 24 months $30b – The Libs haven’t really axed this have they?
2. Summary of Recurrent Expenditure Commitments page 5 $18.8b
3. Investment Commitments page 6 of Liberal $1b.
4. Detailed Table of Recurrent Expenditure Commitments page 7-14 $37.9b
5. Investment Expenditure page 15 $4.4b
6. Detailed Table of Savings page 16-19 $21.5b

Answers on a postcard...


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eblode
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Friday, August 20, 2010 - 03:38 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,
I'm not a punter....I only play the market.

And while climbing into those watery areas where the minnows keep climbing amongst the rocky climes I found another lil beauty to replace LYC...watch HSN.
Oooooo I luv those lil ones

Eugenio


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rdumas
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Hi Dolphin,

Very scary stuff. I already knew half of it but was scared off even more by the other half that you revealed in your post.


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

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billt
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Friday, August 20, 2010 - 04:42 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)



hey Eugenio

Hansen Tec HSN

Turnover/Profit/Cash look pretty solid, but little growth in the past 24 months.

Someone (Director?) sold a shed load in March '10...and the price dropped 20% immediately.

Why do you feel she is a good little one? Takeover Target? Or do you just love the chart?

Ye.30/6/2010 (provisional)
$57m turnover
$10m profit
$17m cash @ Dec09

Ye.30/6/2009
$54m turnover
$11m profit
$20m cash

Interested to hear how you pick out the tiny tots?

Bill


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eblode
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Friday, August 20, 2010 - 06:38 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)



Bill,
The secret to picking up these "tiny tots" is quite simple.
First thing in the morning I place the page in the AGE with all the shares listed.
Then I step back around 10 feet and with my trusty dart I let fly. Where it lands is the share of the day. Today it picked HSN, yesterday we hit SDM.
That's all there is to it. Be sure your page is not behind a valuable painting.

Cheers,

Eugenio


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p3t3
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Friday, August 20, 2010 - 08:36 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)




eblode wrote on Friday, August 20, 2010 - 02:34 pm:

l'm certain that Abbott will win. It's been a fun election but tomorrow it gets serious. So say bye,bye Julia and welcome home Tony.


How about a hung parliament, with the balance of power in the hands of the Independents (including far-north Queensland's unpredictable Bob Katter) and, perhaps, the first-ever Green Member of the House of Reps. Result would remain unclear until well into next week, perhaps into the following one. Surely only the bookies would win.

Then no substantial legislation would be passed for the whole term of the government. And aren't markets supposed to hate uncertainty?


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breaker_1
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Friday, August 20, 2010 - 08:55 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)



Bob Katter is a Saint up here and about as unpredictable as a croc chewin' ya leg.
I just came back from Mt Isa rodeo [ he was there doing the pollie thing] and you would have thought Micheal Jackson was resurrected
Please read post 997.
I hope Eugenio is right


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





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p3t3
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breaker_1 wrote on Friday, August 20, 2010 - 08:55 pm:

Bob Katter is a Saint up here


Hello Breaker_1

The point was supposed to be about the uncertainty of Saturday's outcome, and how the markets respond to uncertainty. There might just be opinions out there about "Saint Bob" that differ from yours.

Just my view, eh.
Pete


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ody
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Saturday, August 21, 2010 - 08:30 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)



From the Daily Telegraph (Sydney - the epicentre)

Either side requires 76 seats to form a government outright. But Centrebet analyst Neil Evans said he is now picking a hung parliament.

"If it comes down to a seat count, I would now be picking 74 for Labor, 72 for the Coalition, three for independents and one Green," he said. "I can't see Julia Gillard getting over the line in her own right. But 24 hours ago I was giving her 76 seats."
----
My view (Ody's): Given that momentum yesterday stayed with Abbott, and Gillard's aggression was psychologically shrill, desperate-sounding and off-putting, I think that, though we may not know for days, a hung parliament is now quite possible, and an Abbott win perhaps more likely than one for Gillard. This is based on my perception in situations like these that late momentum in a campaign is often underrated while people keep looking at "old" figures. In Australia, late momentum turned in favour of Hewson against Keating, and in favour of Howard against Latham. In each case the final result was more strongly in favour of the winner than had been generally expected.

Of course, I cannot really assess the STRENGTH of the momentum, but what I have been able to see suggests to me that it is strong. Whether it is enough, however, is impossible to pick with real confidence. The safer bet might be a hung parliament - though that event is in practice fairly uncommon, particularly once evidence has started to move in favour of one candidate against the other.

Even so, one cannot rule out a Gillard figure, going by "old" figures. And emotionally speaking Abbott carries much baggage. However, hatred for Gillard seems to me to have grown, except in Victoria and SA. But perhaps those states will just save her. If they did not exist I think that Gillard would be a goner.


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pjf000
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Ody, have you tried to chart the movements in sentiment? It appears to be tracking the XAO in a sideways movement along a narrow channel and waiting for a breakout. Rudy would have it as a wave 3 and Rash may think that Uranus is favouring Abbott over Gillard as Mars dominates Venus. We'll all know soon enough.


Markets can remain irrational longer than you can remain solvent

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billt
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Thanks Eugenio,

I'll try it on the Sydney Morning Herald and see it it works here too...

Big dart or little dart...?

Feathers on the dart or just a cheapo' plastic Big W job...?

Have ya' ever tried it with an octopus! (picking little ones I mean)

Bill


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billt
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Welcome to the US “Summer of Recovery”

Back in June, President Obama proclaimed that this US summer would be “Recovery Summer.”

With a little over three weeks left in the summer, the evidence is that far from recovery, the summer has seen a worsening economic situation.

News this week:

Philadelphia Federal Reserve Bank’s business activity index plummeting to - 7.7 in August from + 5.1 in July.

Jobless claims rose for the third straight week, up by 12,000 to 500,000, hitting a 9-month high.

Bankruptcies have reached nearly a 5-year high, the highest level since 2005. Reuters reported earlier this week that “for the year ended June 30, there were 1.57 million bankruptcies, up 20 percent from 1.31 million a year earlier.”

Late mortgage payments spike in the 2Q verses a year ago as homeowners fell behind on payments.

Housing construction missed expectations.

Building permits nose dived by 3.1 %.

Congressional Budget Office (CBO) released a new projection of the deficit, reflecting a worsening of the deficit picture for fiscal 2011.

Nearly 50 percent leave Obama mortgage-aid program

US Economy Showing More Signs Recovery Is Slowing

Recovery Summer: At Small Firms, Job Cuts Run Deep

Forget Deflation, Inflation on Horizon: Strategist

It Looks Like U.S. Bonds Aren't Supported By China Anymore

China cuts holdings of US debt, again

Check out the latest numbers:

US National Debt $13.3trillion
US Deficit $1.4 trillion

http://www.usdebtclock.org/


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ody
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pjf000: Share markets compared with elections

No, I haven't tried to chart the sentiment of voters, though to an extent that can of course be done. As with share market charts, what the picture would show is what has happened. And in hindsight one can in both cases also often see how sentiment comes to be shaped into what it is and how that then translates into action.

Also, in both cases, it is more difficult, though in many instances not impossible, to predict, from the observations that one makes of both what HAS happened - and, to my mind more importantly - what IS happening, what is likely to happen next. If I saw this election as the performance of a company in a share market, I would say that the pattern is too difficult to base a solid conclusion on. In other words, I would take it that, like a company, the direction of the graph is too uncertain.

One can even so "get behind the graph", as with a company, and find out as much as one can about what factors seem to be operating, and how they may lead to a particular result. This I have certainly done in full. But, as often happens in the case of shares, too, I find the direction too hard to predict. I stress, at the same time, that I see this pattern as very unusual in my own experience. Much more often - judging from all knowledge I gather - I do not find elections difficult to predict. For that matter, my record in the case of shares is good too, but there are times when I find either the market, or the performance of an individual company, or both, hard to predict.

By the way ... I found it interesting to read today that while the punters usually can be relied on (the gamblers, I mean), they did get the most recent WA election wrong. I do feel that modern elections are becoming harder to predict, as the number of "rusted on" voters has continued to decline. This election was a beauty in that regard, with a very large number of undecided voters recorded even by the most recent opinion polls.

(Message edited by ody on August 21, 2010)


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ody
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Sky exit polls suggest Labor lead - Channel 9 likewise

The following comes from Sky itself. I read elsewhere that apparently there had been a move directly from Greens to Labor. That was/is a real danger for the Coalition, although Green votes would most often end up with Labor through preferences anyway. Nevertheless, if a large swag goes directly to Labor that makes those votes quite unambiguous.

Also, as this poll was held in marginal seats, that would suggest that if the results are reliable that most likely Labor is winning.
--------------------------------------------------
Sky News' exit poll shows Labor leading
Updated: 17:07, Saturday August 21, 2010
Sky News' exit poll shows Labor leading

Sky News' exclusive exit poll shows Labor leading 51% to the Coalition's 49% on a two party preferred basis.

The primary votes show the Coalition with 45%, Labor with 42%, Greens with 9% and Other 4%.

The poll, commissioned from Auspoll, was conducted in 30 key marginal seats.

Auspoll analyst John Armitage says the race will go down to the wire.

'This batch of seats is a bit tougher for the Labor party, a bit better for the Liberal party. So it would be more like 52-48 nation wide (to Labor).' says Armitage.

While the poll indicates a Labor win, Mr Armitage said any outcome is possible tonight.
-------------------
NEXT:

Channel 9's exit polls also indicate a 52-48% ratio, but at the same time very sharp swings against labor in a number of marginal seats.

However, if Sky did its job well for 30 marginal seats and if those showed the same kind of swing it is difficult to see how both of these comments would be right. Maybe the reporting is not precise enough in one of these cases.

Even so, it would seem that Labor looks like winning.

(Message edited by ody on August 21, 2010)


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ody
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The idea that it would be a hung parliament is the one I should have stuck with - that will be the last time I'll pay attention to exit polling.

All in all, as I see it the result is more of a win for Abbott than for Gillard. Indeed, to knife a prime minister and then to come up with a result like this as his replacement is surely a kind of loss, at least.

As for the likely procedure from here, and assuming that the parliament does remain hung (i.e. neither side gets the 76 seats needed to form government), see the link below. Basically it would seem to be a matter of both sides trying to form a government with enough independents. Here the Coalition may well have the stronger hand, as three of the independents are conservatives, and, although they will extract some sort of price, they would probably not like to face their electorates as supporters of a Labor government with little legitimacy. Already it is clear that the Coalition gained about 400,000 votes more, to date, and it had a higher percentage score for both the primary vote and the two-party preferred one.

It'll be interesting to see how things will work out for the bookies. They (or at least some organisation or other) did enable one to place bets on a hung parliament, and, as that is what the count will probably eventually declare, those people should be richly rewarded!

Here is the link re the procedure for dealing with hung parliaments:

http://www.theaustralian.com.au/national-affairs/minority-government-how-it-work s/story-fn59niix-1225908317895


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market_mad
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p3t3 wrote on Friday, August 20, 2010 - 08:36 pm:

How about a hung parliament, with the balance of power in the hands of the Independents (including far-north Queensland's unpredictable Bob Katter) and, perhaps, the first-ever Green Member of the House of Reps. Result would remain unclear until well into next week, perhaps into the following one. Surely only the bookies would win.

Then no substantial legislation would be passed for the whole term of the government. And aren't markets supposed to hate uncertainty?




Great call there Pete!!

Interesting to see how the markets react today. AUD dropped 1 cent from 4.50am to 5am this morning - currently trading up from the lows at 0.888

Cheers
MM


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ody
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MM: you are right. Pete's call was indeed excellent.

At the moment 73 vs 73 in the House looks the most likely, with Denison being kept by Labor rather than gained by Wilkie.

It has to be added at once that so many votes still remain to be counted that 73 vs 73 can only be an estimate.

What is extremely unlikely is that either side will govern in its own right, i.e. get 76 seats without assistance from others (i.e. one new Green MP, and three "old" conservative-minded independents, as things stand right now).

The most worrying thing about the outcome is that neither side would have enough standing in the lower house to claim a solid mandate whenever the Greens in the Senate decide to block something proposed by the House of Representatives. Even if, say, Abbott were able to bribe the three conservative independents more easily than Gillard, which would mean that we might have, in essence, a "conservative" vote in the House, this set-up would still be feeble, because of likely Senate obstruction. A good thing of this outcome, by the way, would potentially be that the independents may force him to go for a more advanced broadband solution - for what he proposed in this area is not something liked by many, and certainly not independents from rural Australia.

Mr Crook in WA - essentially a conservative voter, but a kind of independent - has made Gillard an attractive offer: abolish the mining tax, and I shall give you my vote. If she were to accept that, it would, in the short term, give her a real chance to obtain power, though she would have to bribe the three country conservatives as well, which might be harder.

It is an interesting thought - and not at this stage an utterly fantastic one - that Abbott might have to accept the NBN (or something like it) to gain the upper hand, and Gillard might have to surrender the mining tax.

In fact, if the number of seats is even enough to give Abbott any chance at all, almost certainly his best bet would be to promise an NBN right now, as that would probably gain him the three conservatives, all of whom are concerned about this issue, and possibly thereby nullify the impact of Crook's promise.

Conversely, Gillard will probably find it very hard to abolish the mining tax altogether. It is not impossible that she will, though, for power is in essence her only concern.

Anyway, this horse-trading is shaping up into what could be an interesting outcome.

Whatever that outcome will be, it is not likely to be a good one, as whoever governs in the lower house is confronted by a Senate where the Greens can hold up whatever the Lower House wants. Had either Gillard or Abbott won enough seats to claim a majority, they would have had far more of a mandate. Neither of them is likely to be able to claim that now, whoever gets in.


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rdumas
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Sectors and their contribution to the XJO today


It's interesting to see which sectors are up and down today.





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

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eblode
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Rudy,
The only sector of interest to me is EXS which you correctly coded last week in your post #3796. From .37 it's now over .54 and running hard towards .60
Bought my last swag on the opening at .48. Hope Cat Lady caught some. (I'm sure Bridog must of).

Bill, This is the one my dart hit last Wednesday.

Eugenio


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rdumas
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Hi Eugenio,

As I said to you privately, you deserve those rewards mate. Great call.


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

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billt
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Monday, August 23, 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 Ody

On the bright side, a Coalition Minority Government, without the control of the Senate, perhaps might put downward pressure on government expenditure, which ultimately will reduce the National Debt.

I would be quite happy if Labor/Greens blocked $60 billion of the Coalition election promises over the term of the government, so that by 2013 we would have '$ Zero' National Debt.

(I'm sure Tony & Joe wouldn't really mind that outcome...they can just blame it all on the Senate)

If we end up with a Labor Minority Government with the Greens in control of the Senate, we will have a bigger mining tax, a carbon tax, and massive expenditure to fund the Green's programme as well as Labors - forget $95 billion debt by 2013, think $200 billion.

There might be an actual benefit with a Coalition Minority Government...?


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ody
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My latest view ...

I shall stick my neck out. PLEASE NOTE: THIS PREDICTION IS BASED ON THE ASSUMPTION (WHICH IS *NOT* AN ENTIRELY SAFE ONE TO MAKE) THAT EACH SIDE WILL HAVE 73 SEATS.

I predict that it will prove easier for Abbott to win over the three conservative independents than for Gillard to do so. Gillard would find it potentially attractive to yield to Crook's demand that she scrap the mining tax, but I think that she will find that too big a price to pay, both politically and fiscally. That would mean that, with 73 each and only one Green seat supporting her, she would still need the three conservatives.

Those, I think, will prefer Abbott in principle, but squeeze him really hard. One major price he may well have to pay is to accept that he must go for something like the NBN. I believe he has kept that possibility up his sleeve, as he emphasised that he did not trust "this government", i.e. Gillard, to spend the money responsibly. His current broadband policy, such as it stands, would be his weakest spot, and the three conservatives would want that to be altered for themselves, and additionally realise that in any new election the NBN would play a crucial part. In other words: if Abbott were to change his mind on this, his electoral standing would be greatly improved. I think he will find it hard to resist going down that path.

Obviously he may well have to compromise on other issues too, but my guess is that this will have to be his main sacrifice. All three rural conservatives have stressed their concern about broadband.

I find it hard to see them joining Gillard if they can possibly avoid it - it would endanger their position with their voters if they did so (most of those hate Labor), whereas if they can squeeze major concessions out of Abbott which will benefit the country (rural Australia) AND the Country, they will be heroes in the eyes of their constituents and many others. Australia would then have NO mining tax but WOULD get a good broadband system, and this outcome would gain the Coalition AND the three conservative rural MPs great general support.

I add here that that is how I would see the matter myself, and this may influence my thinking ... but I believe not. I think that what I am envisaging is a "winning" scenario which would outmanoeuvre Gillard, who would not be able to offer something quite as tempting to the three independents. It is those three, not Crook on his own, or the support of the Green MP, who will settle the matter. Again: this reasoning ONLY has validity if the provisional 73-73 continues to stand.

Abbott would of course seem inconsistent if he offered an NBN deal, but his supporters would certainly forgive him, and his political arsenal would be viewed as much stronger nationwide. His problem would be to find the money, which would possibly lead him to water down his parental leave scheme. However, I'd expect him to look for a different way, as that scheme is also one of his strong suits.

If this reasoning is at all correct, materials will continue to benefit as there would be no mining tax. If Gillard were to get in, she might have to do so with the support of Crook, which would ALSO mean no mining tax. Or she might satisfy him by greatly reducing it. I think either prospect is unappealing to her, and would greatly reduce her political standing among her supporters.

All in all, I thus feel that resources are likely to continue provide the best punt for them as do punt - though of course only to the extent that Australian taxes influence the matter.

Rudy has drawn attention to the way the sectors are going, and resources are quite strong. The other most telling point is, of course, the collapse of Telstra.

All my speculation here is no more than that. I think it is to the point in principle - but we haven't got secure seat numbers yet.

Ironically I feel that at the end of the day a majority of Australians would live contentedly enough without a resources tax, but that they would much welcome an improved broadband scheme.


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rdumas
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Hi Ody,

Could another possibility be a partial NBN targeted only at the country areas? I suspect that the cost of running fibre cable in country areas would be less costly to running it in congested city areas.


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

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ody
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Hi Rudy,

Yes, I imagine that would probably do it too. Would have a cost advantage still. At the same time, many would prefer a more wholehearted solution. But Abbott could plausibly argue that at the moment that would be too expensive, and that he'll a present make a start in the way you suggest. AT any rate, I think his solution would have to be in this direction, plus, presumably, other concessions to country people. I think he would be far more willing to give those than Gillard, not least if it meant that he got a better hold on rural Australia generally, where Labor isn't generally strong. Gillard already HAS promised an NBN, so this is an area where only Abbott can make a difference now.


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p3t3
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market_mad wrote on Monday, August 23, 2010 - 08:57 am:

Great call there Pete


Thanks MM...and Ody.

Kudos too for Ody's political instincts...found himself - unusually - unable to call this one. We've all since found out there were good reasons why that might be.

If the Coalition gets 73 it looks (to me) like they'll win the independents - though not the Green - as a block and be able to form minority government. Oakeshott looks like he's open to taking on the Speaker's role. I suspect all three just want genuine commitments to proper regional broadband, so that regional access speeds at least approach those in the metro areas. I doubt they care much about full NBN implementation in the cities. They might even be persuaded that some of the cash saved could be directed towards other regional infrastructure initiatives. The scrapping of existing high speed (100mbs or more) HFC cable alternatives in the cities just to support the NBN fibre case looks wasteful to me. Lower cost workable alternatives to full NBN rollout look possible, at least in the short to medium term, that would probably remove all current bottlenecks.

The mining tax looks dead - only the Greens want to seriously punish the mining sector. Not even the unions want mining investment to dry up to the extent that looked likely under the RSPT. The protests of the smaller miners about the MRRT might get a better hearing - the are prospective future employers of some significance.

Just my view, eh.
Pete


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ody
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Bill, MM, Rudy, and Pete:

I believe we are thinking along similar lines. If only the pollies were prepared to take our advice ... Certainly Abbott should, for this is the way ahead for him. Bill, I agree that the Coalition would be much better to have in the lower house, not least because they would not spend as much anyway, and gladly blame others for imposing cuts on them!

I find it difficult to see the three conservative independents "selling out", as they would surely see it, to BOTH the Greens AND Labor. So they are in a strong position (and probably strongly motivated) to push Abbott as hard as they can.


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p3t3
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ody wrote on Monday, August 23, 2010 - 03:07 pm:

the collapse of Telstra


TLS went ex a 14cent fully franked div, which accounts for much of the drop. It also looks to have lost the deal the sell its copper network to NBN Co. That only looks like a short term problem. If they subsequently retain the capacity to offer 100mbs HFC on their own network there will be opportunities for them to recoup much of what was lost.

TLS certainly requires a change in management culture. They've always offered the lowest value for the greatest cost. Thodey is now aware of how that mentality is affecting Wireless growth rates. If he can change the management myopia there will be far greater opportunities down the track.


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ody
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p3t3: Telstra

You are right of course, that the dividend counted for a lot. Still, of the 19 cents which the stock lost, 5 cents were not due to the dividend, and that does not seem to me insignificant - particularly also in the larger context of how Telstra has performed in the relatively recent past. But I do take your other points, as well.


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Ody and all,

Have you been listening to Oakeshott, one of the independents? I think you are missing the point with him. He doesn't want the goodies he is offered, he wants parliament to have more power and the executive less, via parliamentary committees and the like. He wants the various reports like the Henry review and the climate change report, and others, to go through a parliamentary process, not the be hidden by the party in power. He wants of the people, by the people, for the people, not of the party, by the party, for the party. (Have I got the order right?).

He's looking for major change to the political process.


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p3t3
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ken wrote on Monday, August 23, 2010 - 07:38 pm:

Have you been listening to Oakeshott....


yep, which is why he looks open to the Speaker's role. All the independents want a shift in the power base from the Party Executive(s) towards the Parliamentary membership in general - understandable from the perspective of independents who have left behind previous party affiliations on idealogical grounds.

However they are also all from regional electorates and will have to demonstrate their attempts to get greater regional infrastructure spending if they want re-election, which I believe they do.


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p3t3
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ody wrote on Monday, August 23, 2010 - 05:47 pm:

....of the 19 cents which the stock lost, 5 cents were not due to the dividend....


Hello Ody

fully franked div is worth 14cents plus 30% of that due to the tax rebate, which comes to an additional 4.2cents - or 18.2cents of the 19cents movement. The 0.8cents could be attributed to momentum - or just about anything else, including rounding error.

Just my view
Pete


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ody
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Ah, Pete, you are right about TLS.

In fact, then, the price did not change at all. That's important, as it indicates utter neutrality to the stock in this new/undetermined political context.

Thanks!


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ody
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Ken - the three conservative independents

Yes, I agree with you as to what shift he wants in the procedures and the emphasis. All three were, though, the other day also talking about the need for more attention to the bush, and particularly broadband. But of course they are not necessarily identical - and as Pete says, he may be open to the role of Speaker. He certainly seems to have an intense interest in the need to do things differently (and I must say I agree and liked his general way of thinking about that). I am not sure whether he WOULD actually like the Speaker's role, for in a sense it might neuter him.

------------
HOWEVER: I am not sure that the Coalition will necessarily get enough seats to form government. One seat now has them only on a slender majority after a counting error was discovered, which took 400 votes away from them. And Hasluck - though still OK - does not look strong.

If Abbott does get the opportunity to negotiate with them he will have to confront the fact that they are conservatives but independent, while the National Party would like their seats.

However, Labor is meanwhile already embroiled in deep internal division, between the parliamentarians on the one hand and the "faceless men" on the other.

Difficult times!

I see on the site of The Age, just now, that Hasluck has many pre-poll votes which may be pro-Coalition, but also many subsequent postal votes which seem to be likely to be pro-Labor. So this one is looking uncertain, and may even go through more than one count.

This the trouble about this whole situation - we don't know who will get which seats, yet are already well into planning and plotting, with the pollies inevitably not waiting ...

(Message edited by ody on August 24, 2010)


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bridog
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Tuesday, August 24, 2010 - 09:58 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)



Eugenio,

Thanks for heads up on EXS, just seen your post, unfortunately they haven't been on my radar. Will keep an eye on them now, but horse may have bolted?

Here's one my dart hit . . NWH, having a bit of a run.

For sure it'll go backwards now i've named it . .

Cheers

Bridog

PS Ody, Rudy, MM, Pete, Bill: great postings on election, we are all of one mind . . prolly makes us a minority!


Old enough to know better . . .

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ody
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Oakeshott's idea of a "combined" government

He has seriously proposed (see ABC news and/or the Fairfax papers) that we should have a government of more than 76 people bringing together people from both sides of government. In practice - he envisages - the government might consist of a Gillard government including Turnbull, or an Abbott government with Rudd in it.

Just imagine trying to put such a thing together - leave alone getting it to work. And imagine what the politicians would feel who are NOT included. Are these - people from both sides of politics - going to form an opposition.

Does he seriously think that Turnbull would work UNDER Gillard, and that the current Coalition would not mind "losing" Gillard.

As our system stands, it does not provide any rational or organised mechanism for creating something so haphazard. And it would certainly NOT provide "stable" government.

It's a well-meant, but totally unrealistic idea - it would lead to something being cobbled together quite arbitrarily.
And it does not meet the requirements of the Constitution, as far as I can see. Or the people of Australia, who ALL of them (almost) saw themselves as voting for a particular party, not for an unknown new type of coalition which does not reflect AT ALL what they had in mind. The voter votes for a party as well as a local candidate, and usually resents it if a local candidate moves over to "the other side". Not even to mention the politicians who belong to a party and see their colleagues leave that.

If this is to be the outcome the independents try to create, we'd better have a new election forthwith.

For something like Oakeshott's arrangement to be created we'd need to think of a completely different system first, which would need to be put in place with the approval of the nation as a whole. And then a re-election would be necessary.

One does have to agree with him that 76 is not a large enough majority (whichever it is arrived at) for a government to last with any degree of comfort (as people will get sick, die, or will squabble, etc). But, the system being as it is, the attempt will need to be made.


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eagle
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Re Bank Hybrids which Ody and others were in discussion about a while ago. Some commentary from Eureka Report author can be found at attached link

In this week’s Eureka Express we offer you Jim Stening’s take on bank hybrids.

While currently at a discount, Jim says the bigger yields available from bank hybrids with step-up clauses are worth the risk. Make sure you check out his article: ‘Can hybrids rally further?’

http://eureka03.eurekareport.com.au/iis/iis.nsf/lpages/RWIE-83SVH5?opendocument

"While there is some risk of non-redemption with the step-up securities, this risk is considered negligible for major bank issuers. The long term global reputational risks of not “calling” hybrid (and subordinated debt) instruments for large debt issuers such as the Australian big four banks is far too great.

“The step-up securities have rallied hard in price since the start of the financial year and yet are still offering better returns than the CPS securities.”


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billt
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Perhaps being the 'Opposition' to this Minority Government will be the ultimate winner.

There is every possibility that we will be back to the polls within 12 months, and whoever is the 'Opposition' will be in a much stronger position than the 'rabble' that might form a Government.

Coalition with Country Independents who dislike their National counterparts;

or

Labor with 'conservative' Country Independents who dislike the DNA of their bed fellows.

...oh, and the Greens who'll want to tax more, spend more, and demand their pound of flesh...


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ody
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Bill - formation of government; subsequent elections

I read the matter much the way that you do: my hope is, to be quite specific, that the inadequacies of Labor will get yet more clearly revealed, so that they will be in the wilderness for at least ten years. That, unfortunately, might well mean that we are actually best off having them in office for a bit longer, so that they can further demonstrate their incompetence and internecine warfare, and so strongly alienate a larger portion of the electorate that that will be very happy to send them packing. The process surely would take no longer than 1-2 years.

Meanwhile one would then hope that the coalition, both intrinsically and in the eyes of the voters, comes to look more unequivocally attractive, so that they will be able not only to persuade more voters but also be stronger within themselves.

I don't think that right now a minority coalition government would necessarily be a disaster, though. It would probably work OK enough. But a true Labor collapse would most easily arise from it being in government for longer. And that might also lessen the appeal of the Greens, for whom so many have now so airily voted.

In particular, those who seem to be so happy with a supposed Labor-Green alliance might find it instructive to see those two groupings actually in power together, while the opposition calmly gains in strength, expertise, and competence.

Admittedly, the thought of having to see yet more Gillard on the box does make me feel distinctly uncomfortable. But perhaps it is better to suffer a little longer in this respect, as too many don't as yet quite see her for what she is.


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ody
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eagle: Hybrids

Thank you for posting that, eagle. I subscribe to The Eureka Report, so had seen the article, and find it interesting.

I must say that I have myself been quite happy with my hybrids. They produce good payouts, and have also appreciated in value while much of the share market has been erratic. The capital appreciation is less my concern than Stening's, though, albeit that I agree with his reasoning. My main objective is to ensure that I don't LOSE value through them, while good yields keep coming in. With franking, many of the yields continue to be quite high. (I get full franking, which amounts to an "extra" 43% (on whatever is franked).

As well, I continue to believe that interest rates will over time go up rather than down, given the amount of over-stimulation in the world and the riskiness of assets. Also, banks will put up interest rates no matter the RBA, as they have difficulty getting money, and will have to pay for it. This scenario means, then, as Robert Gottliebsen has also pointed out, that the portion of the hybrid that is based on the rates for 90-day bankbills will continue to influence the yield positively, and hence make the hybrids more attractive to buyers than they already are. Buyers are obviously becoming more aware of this.

FIIG Securities, of which Stening is managing director, is one of the few organisations really doing research into this kind of investment.


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jaded
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Ody,
I think you should take your considerable intellect and consider the Nationals.
You,perhaps, are too urbane to have had much thought over the Nationals/Country Party but us here out in d'Sticks have perhaps much more of an 'appreciation' of the Country Party now called d'Nationals.

Ody,your 'favorites',the Liberals can not EVER form any Government without the blessed Nationals.

Basically the Country Party is Agrarian Socialist ie take money from the City and put it into the Farmers.Why?
well,farmers are the Salt of the Earth blah Blah BLAH.

Ody,Rural,Regional Electorates are no longer populated by Hard Working Farming Types.
Welfare is the Basic Income Source of Regional Australia.
Welfare to most from the SS but also 'subsidised' by weather too dry,too wet;Disease this or that etc etc.

Ody,I reckon in the next Decade we will see the Elimination of the Nationals.They do a really poor job of representing Rural/Region Australia.

Really the Nationals only exist because the Liberals won't 'compete' with them in elections.

Only because Qld is so decentralised do the Nationals 'reign' here.Rest of Australia the Nationals are Irrelevant other than to boost Liberal Numbers.

Ody,just watch for the New Wave of Independents in regional Oz.If we don't have another election in 6 months?
well,a motley crew of Exers will stick their hand up Elect Me!!

Ody,the Nationals can't handle Independents.Remember One Nation?all they had to do was stick up any clown or deadbeat against a National and They WON!!

Anyhow,just wanted to counter your,Ody,South Aust 'nancy' View that the Liberals are the natural 'leaders'/fiscally responsible etc blah
They [d'Liberals] get Nowhere without the 'decrepit' Nationals Backing

and the Nats are losing their voter support
[at last!!]
IMHO


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

Sir Zelman Cowen c 1970.

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billt
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Headlines overnight in the USA

Existing Home Sales - Actual: 3.83M Forecast: 4.68M, plunge 27% to lowest in 15 years

Hindenburg Omen Tripped Again

Dow Faces Bouncy Ride to 5,000: Strategist

Economy Caught in Depression, Not Recession: Economist Rosenberg

Avoid Treasuries – They’ve Had a 19-Year Rally: Marc Faber


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billt
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CHINA BUYING 191 TONS OF GOLD

GOLD UP $25!!

China has confirmed the intention to purchase 191.3 tons of gold from the International Monetary Fund at an open auction, Finmarket news agency said.
World central banks started to increase their gold reserves after prices on gold began to climb in 2001. The IMF sells gold within the scope of a program to diversify sources of income and achieve an increase in lending.
The IMF announced an intention to sell 403.3 tons of gold in accordance with the adequate decision made by the board of directors of the fund in September of 2009. India, Mauritius and Sri Lanka purchased about 212 tons of the amount at the end of 2009. India purchased most – 200 tons.
China’s interest in international trade is connected with the development of the nation’s economy, as well as with the growing consumer demand in the country.
“Chinese officials have confirmed previous announcements from IMF experts and said that the purchasing of 191 tons of gold would not exert negative influence on the world market. China is interested in the development of the domestic consumer market,” the agency reports.
Most of Chinese citizens believe that investing in gold jewelry is a good way to avoid inflation, Rough & Polished agency said.
The IMF has received the profit of $7.2 billion from gold sales. A part of the funds is to be used for crediting poor countries


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billt
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Further bad figures out from the US overnight:

'Durable Orders' 0.3%, market expected 3.0%. 90% huge miss!

'New Home Sales' 276k, market expected 334k. 17% miss.

'Existing Home Sales' 3.83m, market expected 4.72m. 19% miss.

Out tonight:

'Initial Claims' Prior 500k, market expects a reduction

On Friday:

'GDP' Prior 2.4% - market expectations not that hopeful!


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ody
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Bill,

Great to have such figures. Many thanks.

(Message edited by ody on August 27, 2010)


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ody
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Why I am not interested in shares at the moment

Over the last six months the S&P500 and the XAO started at nearly the same point and now again are at one. While there has been variation on the way, the similarity is, over this distance, far more striking and important.

As I have been saying for a long time, this year was bound to show a deterioration in the pricing for shares, and the only thing that was uncertain was just when that would start.

Going out in October, I was, as often, on the early side, as the top was not reached until mid-April. Even so, I went out at a better level than where our market is today, and though I missed that market-high, my money was working hard enough for me in excellent deposits and interest rate securities. I have certainly made a good deal more than I, personally, could have done if I had stayed in the market, or seriously tried to "play" it short-term. I note from observing others that although successes do occur, so do failures, in attempts to "pick" the short term moves in a market so volatile as we have been seeing. The last three months, in particular, would not have appealed to me at all.

Almost by the day the situation in the US and the rest of the developed world looks like getting worse - entirely as I had expected, even though I could not time the onset of this accurately. I certainly think that no early improvement is in the offing at all, and that means that except for the audacious few who really can consistently win in short-term trades, or for those who go short, the market is not suitable for the more "ordinary" investors who would like to see some upside for at the least a number of months, if not years. I am sufficiently in this category not to see the market as useful to me personally, as I don't usually benefit from a volatile or downward-trending market.

I think that the performance of the XAO over the last several months has been sufficiently close to that of the S&P500 to refute those who think that in a downturn, either economically or in share markets or both, somehow Australia's share market will prove it has "decoupled" and go its own way. It did not happen in e.g. 2008, and I see no evidence to support this theory now either.

Accordingly, while I do keep a general eye on the market, I don't take a day-to-day interest in it, and am only examining individual stocks here and there, so as to be prepared when a better time comes. I would see a "better time" as occurring possibly if markets are significantly savaged or more probably when after having been in the doldrums they rally with some real conviction. I don't even mean that that would require wonderful fundamentals - 2009 was good enough for me. However, as the main worry currently does concern fundamentals, it would be logical that the very best moment for re-entry would be when people persuade themselves, at least, that the fundamentals are getting better. That, after all, was also what made the 2009 rally such a success: the mistaken sense that the global economy was well and truly recovering. As though you will bring that about by going further and further into debt, printing money, and trying to spend your way out of trouble.







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ody
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The view of "The Market Timer"

I pay attention to the views of "The Market Timer", of which I have only recently become aware, because (a) its record is good, and (b) its overall attitude to the share market is virtually identical to my own: you avoid markets which fall, and go into markets which rise. Furthermore, you ride the surge up, but you sell your losses short. It is in this way that I have been successful and built up far more capital, since 1983, than I would have done if I had been dependent solely on earnings, superannuation funds run by others, and so-called "financial advisers" who are usually only interested in selling you stocks or managed funds.

The following statement by The Market Timer (but this is only a brief introductory one) caught my eye, and it would certainly frighten ME, if I were in the stock market. Whether it frightens others will depend on their outlook, and, I should think, if they are in the market, on whether the are prepared and able to short their shares. I quote:
-------------------------------------------
Since the beginning of May the All Ordinaries index has been oscillating within a range of 4250 and 4680. Until it breaks out of this sideways channel, the next big move won’t be known. Nevertheless our active strategy, which gauges medium-term trends, generated another “sell” signal on Wednesday.

The slump in stockmarkets around the globe since mid-April reflects a realisation that the Global Financial Crisis (GFC) won’t end until most developed countries overcome their huge debt hangovers.

This great deleveraging has only just begun because total debt has not been significantly reduced but rather the holder of that debt is no longer banks and corporates but governments.

The following chart [not posted here, but the words tell the story, - Ody] shows the extent of the private and public debt problems in America compared with those that triggered the Great Depression of the 1930s.

Notice that by 2007 both the private and public sectors had much higher debt to gross domestic product (GDP) than in 1929, after which the stockmarket fell by 89%. Note also that at the end of the Roaring Twenties only the private sector was overleveraged.
-------------------------------------------
[NOTE: this was an excerpt only, but I believe the message is clear. It does not follow that we'll imitate the 30s, but it is certainly possible that we'll see a significant sell-off.]

 
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