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Trade Trends with Bollonger Bands and Twiggs Money Flow

Archive through September 07, 2010

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

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billt
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Saturday, August 28, 2010 - 03:45 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)



Headline Bullet Point Summary from the USA

or

"The Summer of Recovery"

(my comments in brackets)

Imports drag second-quarter growth lower
- Q2 revised down to only 1.6 percent, from 2.4 percent, Q3 revised down again (they need 3% to stand still)

Bernanke says recovery softer, Fed prepared to buy more
-"The committee is prepared to provide additional monetary accommodation through unconventional measures if it proves necessary, especially if the outlook were to deteriorate significantly," Bernanke (keep those printing presses rolling!)

Bernanke: Fed will take action if economy falters
-Bernanke acknowledged the economy is fragile, especially after the government just reported the weakest quarterly growth in a year. And he said high unemployment poses a serious threat. (25 million unemployed & 40 million on Food Stamps, wow! what will a recession look like)

Jackson Hole Debate on Recession Risk Shows Bernanke Challenge
-“There’s still a significant risk, maybe one chance in three, that there will be a double dip,” said Harvard University Professor Martin Feldstein ('significant' sounds like 50:50 to me?)

Chairman of the Joint Chiefs: National Debt is a Security Threat
-The national debt is the single biggest threat to national security, according to Adm. Mike Mullen, chairman of the Joint Chiefs of Staff. (he is worried that his budgets will be cut)

Youth employment lowest since 1948
-The share of young people aged 16 to 24 who were employed this summer fell to 48.9 percent -- the lowest rate on record since 1948. (and these are the poor souls who will need to pay back the $13 trillion debt in the years ahead, but they can't even find a job)

Economy edges closer to stalling, government says
-The economy turns out to be weaker than we thought, and the outlook for the rest of the year is now looking dimmer.(bleeding obvious...)

Why GDP Growth Is Slowing
-Trade Imbalance Playing Role; "primarily reflected a sharp acceleration in imports and a sharp deceleration in private inventory investment." (still living beyond their means...)
-Reflects Anemic Commercial Activity (lots of fear in commercial land..)
-Next Quarter Doesn't Look Much Better ; "The outlook for the third quarter isn't much better with economists expecting just a 1.7% growth (get ready for another revision down, they good doing that...)
-Risk of Another Recession? the report still put an exclamation point on a week of bad economic news that has raised fears the nation could plunge into another recession (exclamation point, more like a full stop)

Bullish Sentiment Continues To Wane
-Bullish sentiment fell 9.4 percentage points to 20.7% in the latest AAII Sentiment Survey. (go those Bulls!...someone has to buy my shorts)

August Consumer Sentiment Index Downwardly Revised To 68.9
-the consumer sentiment index for August was downwardly revised to 68.9 from the previous estimate of 69.6 (see, more revisions down - there everywhere...)

Downward revision of GDP growth a strong signal of stalled recovery
-The Commerce Department on Friday downgraded the nation's economic growth in the second quarter, providing the most important evidence yet that the recovery has stalled.(if this was an aeroplane well you know what happens next...)

But Obama said this was going to be "The Summer of Recovery" ....


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billt
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Saturday, August 28, 2010 - 04:49 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)



I forgot to add:

Next week the main US Economic Stats out are:

Tuesday 'Consumer Confidence', so look out here for that on Wednesday morning, and

Friday 'Unemployment Rate' & 'Nonfarm Payrolls'- which will be after the close here on Friday







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polpak
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Saturday, August 28, 2010 - 05:39 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)



Not need a completely different system, just a significant change ;-)


Australian's eager to elect their Governor-General.

Passage of election bill through Parliament the only barrier !


[ Republicans shot themselves in the foot with refusal to accept this very clear desire of Australians. ]


Governor-General chosen by voters retains Constitutional requirement to select his/her Ministers from either House of Parliament, so Executive Government remains answerable.




Parliament concentrate on Legislation, getting it right.


Executive government of Governor-General and Ministers concentrate on managing day to day business of government in accordance with legislation as passed, not just claimed to be coming...




Changing the title from Governor-Geneeral to President does require a s.128 amendment.

IF one house refused to pass bill for popular vote, then it was presented as a Constitutional Amendment Bill, with one house supporting, IMHO would romp home even pass with greater support than our mis-read/mis-interpreted 1967 Referenda to end racial discrimination.


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eblode
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Monday, August 30, 2010 - 09:31 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,
At a recent meeting of Vectorvest investors, which included several stock brokers the general consensus was that this market is the toughest in years to make money. The majority were following your current philosophy of staying out until a more positive direction is seen. I too have to accept that point of view as the facts are fairly plain to see.

Eugenio


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ody
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Monday, August 30, 2010 - 11:31 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)



Eblode and others: today's jump on the ASX

Note the chief reason mentioned in this Business Spectator article: our market is up because Bernanke has encouraged speculation about more stimulus in the US. It is precisely this constant, irresponsible creation of bubbles which each time inevitably also leads to massive sell-offs. It is doubtful whether the US will - as far as the majority is concerned - ever grasp or grant this point. Us investors have lived in a fantasy world for so long that facing reality is a genuine problem for them.

Australian investors who invest their money on the basis of US stimulus should realise they are playing with fire, particularly at a time like this. Overall, both the world economy and share markets are weakening, and looking as doing so further. It is precisely because US growth is NOT what it should be - i.e. that stimulus has not created a true "recovery" - that the Fed there is thinking of pumping yet more money into the system, thus making matters yet worse. A demonstrably failed system is fanatically adhered to as a solution while it has been a major part of the problem. If one does get into the market here on this basis, it is essential to see the risks, and to make very sure one does not overstay in any rally, whether short or longer.
------------------------------------------
Aust stocks open higher

Published 10:06 AM, 30 Aug 2010 Last update 10:15 AM, 30 Aug 2010

By a staff reporter

The Australian sharemarket has opened higher, after a positive Friday close on Wall St, as optimism on further US stimulus efforts boosted sentiment in the local market.

At the 1015 AEST unofficial market open, the benchmark S&P/ASX200 lifted 1.32 per cent to 4427.8 points, while the broader All Ordinaries firmed 1.26 per cent to 4459.9 points.

US markets put in a good session to close the week out on Friday as Federal Reserve Chairman Ben Bernanke eased market concerns by saying the Fed was willing to do whatever it takes to stabilise the recovery, IG Markets analyst Ben Potter said.

"A better-than-expected reading on Q2 GDP also had the markets in a good mood."

We should see good buying interest across a number of sectors including the energy, financial and industrial spaces, after strong performance in corresponding US sectors, Mr Potter added.

"With the earnings season largely behind us, the market will once again focus more on Asian trade as the session matures."

The major banks were all firmly in the black, as ANZ Banking Group stepped up 1.96 per cent to $22.88, Commonwealth Bank of Australia advanced 1.72 per cent to $50.06, National Australia Bank put on 1.90 per cent to $23.49 and Westpac Banking Corporation climbed 1.97 per cent to $22.18.

Investment bank Macquarie Group swelled 2.95 per cent to $37.58.

The major miners also strengthened, with BHP Billiton adding 0.75 per cent to $37.58, after saying in a weekend interview that a takeover of Potash Corp would not affect the company's credit rating.

Meanwhile, rival Rio Tinto lifted 1.97 per cent to $22.18, while junior miner Fortescue Metals Group shot up 2.83 per cent to $4.71.

Gold miner Lihir Gold edged up 0.68 per cent to $4.41 as it announced the resignation of managing director and chief executive officer Graeme Hunt, after final approval for Newcrest's takeover of the company.

Newcrest Mining found 0.39 per cent to $35.42.

Oil companies were positive, as Woodside Petroleum rose 1.35 per cent, despite media reports that safety reviews of the company's Pluto LNG project may push back the project's start date.

Santos gained 1.18 per cent to $14.47 after announcing a deal to develop its Halyard gas field with partner Apache Energy.

Meanwhile, Oil Search added 0.52 per cent to $5.73.

Among the retailers, David Jones inched up 0.20 per cent as the company prepared to defend sexual harassment claims in court, while rival Myer put on 1.08 per cent to $3.74.

Harvey Norman made 0.56 per cent to $3.55 while JB Hi-Fi lifted 0.49 per cent to $20.39.

Supermarket operator Woolworths firmed 1.00 per cent to $28.13 and Coles owner Wesfarmers stepped up 0.60 per cent to $31.80.

Blue chip Telstra grew 1.44 per cent to $2.80, and airline Qantas advanced 2.41 per cent to $2.45 after announcing plans to add 820,000 seats to its budget carrier, Jetstar.

In companies news, Macquarie Atlas Roads advanced 2.06 per cent to $1.24 after posting a loss in H1 revenue, but saying improved traffic on its toll roads would see revenue improve in the future.

On Friday, the Australian share market closed moderately higher, building on Thursday's positive performance, ahead of the release of revised US June quarter growth figures due on Friday night.

The benchmark S&P/ASX200 index was 14.1 points higher, by 0.32 per cent, at 4,370.1 points, while the broader All Ordinaries index rose 14.7 points, or 0.33 per cent, to 4,404.1 points.


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billt
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Tuesday, August 31, 2010 - 08:10 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)



One in Six Americans on Government Anti-Poverty Programs

Government anti-poverty programs that have grown to meet the needs of recession victims now serve a record one in six Americans and are continuing to expand.

More than 50 million Americans are on Medicaid, the federal-state program aimed principally at the poor.

More than 40 million people get Food Stamps, an increase of nearly 50% during the economic downturn.

Close to 10 million receive Unemployment Insurance, nearly four times the number from 2007. Benefits have been extended by Congress eight times beyond the basic 26-week program, enabling the long-term unemployed to get up to 99 weeks of benefits.

More than 4.4 million people are on Welfare.

As caseloads for all the programs have soared, so have costs. The federal price tag for Medicaid has jumped 36% in two years, to $273 billion. Jobless benefits have soared from $43 billion to $160 billion. The food stamps program has risen 80%, to $70 billion. Welfare is up 24%, to $22 billion. Taken together, they cost more than Medicare.


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market_mad
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Tuesday, August 31, 2010 - 10:17 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,

Article on Bloomberg today that I found interesting;

Australia's Bank Bonds Punished on Housing Bubble Concern: Credit Markets
By Sarah McDonald and Shannon Harrington - Aug 31, 2010

Investors in U.S. dollar-denominated bonds issued by Australian banks are demanding higher relative yields on concern the country’s property market is overheating.

The spread between Australia & New Zealand Banking Group Ltd.’s $500 million of 2.4 percent three-year notes and similar- maturity Treasuries widened to 109 basis points from an 87.5 basis-point issue price in January, according to Royal Bank of Scotland Group Plc. The cost of credit-default swaps tied to Melbourne-based ANZ and its three largest peers jumped at least 71 percent since the sale, outpacing the benchmark Australia Markit iTraxx index’s 55 percent increase, CMA prices show.

House values in Australia surged 18.4 percent this year, causing Nobel-winning economist Joseph Stiglitz to say this month that the nation’s property inflation gives “cause for concern.” Westpac Banking Corp., National Australia Bank Ltd., Commonwealth Bank of Australia and ANZ accumulated A$798 billion ($713.4 billion) of mortgage debt, almost 66 percent of their combined loans, according to their banking regulator.

“We don’t have the same type of bets on we would have had four years ago,” said Tom Farina, a director at Deutsche Insurance Asset Management in New York, who helps manage $188 billion. While Australian homeowners may not be facing a U.S.- style meltdown, “we’re certainly hitting some lofty leverage levels from a valuation perspective,” he said.

Four Pillar Banks

The so-called Four Pillar banks, named for a law that forbids them from merging with each other, have raised more than $102.5 billion from bonds in the U.S. currency since the start of 2008, or about 46 percent of their total sales, Bloomberg data including issues by units show.

The lenders, facing regulatory reforms that favor long-term capital over short-dated funding, may need to sell A$162 billion of bonds in the 2011 financial year, 80 percent more than their annual average for the five years to 2007, Morgan Stanley analysts led by Viktor Hjort said last month.

Elsewhere in credit markets, the extra yield investors demand to own global corporate bonds rather than government debt rose and debt insurance costs for European companies surged to a six-week high as evidence increased that the U.S. economy is hurting the world’s recovery.

Emerging-market debentures weakened and government-backed mortgage bonds were poised for their worst monthly performance relative to Treasuries since November 2008. Sara Lee Corp. raised $800 million in yesterday’s biggest U.S. bond offering.

Spreads Widen

Global company bond spreads widened 1 basis point to 179 basis points, according to Bank of America Merrill Lynch’s Global Broad Market Corporate index. The gap increased 2 basis points this month and is 3 basis points higher from Dec. 31. Yields fell to 3.478 percent from 3.751 percent on July 31.

The bonds returned 1.96 percent in August, the best monthly performance since July 2009, according to Bank of America Merrill Lynch index data, as equity markets faltered amid signs the economic recovery may be stuttering. The debt gained 1.47 percent in July, according to the index.

The Markit iTraxx Crossover Index of credit-default swaps tied to 50 mostly junk-rated European companies climbed 12.5 basis points to 537.5 as of 10:58 a.m. in London, the highest since July 19, according to Markit Group Ltd. The index has risen 58 basis points this month, the most since May.

Credit-default swaps pay the buyer face value in exchange for the underlying securities or the cash equivalent should a company fail to adhere to its debt agreements, and an increase signals a deterioration in investor perceptions of credit quality. A basis point on a contract protecting $10 million of debt from default for five years is equivalent to $1,000 a year.

Disposable Incomes

Commerce Department data show that U.S. disposable incomes, or the money left over after taxes, dropped for the first time since January after adjusting for inflation, illustrating how the lack of jobs may prevent consumer spending from strengthening further after purchases rose 0.4 percent in July.

For the year, corporate bonds have returned 8.63 percent versus 6.17 percent for global government debt. The MSCI World Index has lost 5.5 percent including reinvested dividends.

Sara Lee, the maker of Ball Park hot dogs and Hillshire Farm meat products, sold bonds in the U.S. for the first time since 2003, Bloomberg data show.

The Downers Grove, Illinois-based company issued $800 million evenly split between five- and 10-year debt. The five- year notes yield 137 basis points more than similar-maturity Treasuries and $400 million of 10-year debt pays a 157 basis- point spread, Bloomberg data show.

Debt Offerings

That helped U.S. debt offerings reach $97.3 billion this month, a 37 percent increase from the similar period last year, and the busiest August since 2007, according to the data. Companies from Johnson & Johnson to Southern California Edison Co. took advantage of the lowest rates on record as declining Treasury yields encouraged investors to buy corporate debt.

Sales rose to the most since March, when issuance was about $140 billion, the data show.

High-yield, or junk, debt offerings reached $23.2 billion, the most for an August on record even as issuance halted after Aug. 20 amid mounting concern the economic recovery is slowing.

The debt returned 0.2 percent this month, the worst performance since May, when Bank of America Merrill Lynch’s U.S. High Yield Master II index lost 3.5 percent.

Loan Prices

Loan prices fell for the month, with the Standard & Poor’s/LSTA U.S. Leveraged Loan 100 Index declining 0.31 cent to 89.34 cents on the dollar. Loans have returned 3.85 percent in 2010, based on the index, which tracks the 100 largest dollar- denominated first-lien leveraged loans.

Leveraged loans and junk bonds are typically rated below Baa3 by Moody’s Investors Service and lower than BBB- by S&P.

Fannie Mae, Freddie Mac and Ginnie Mae securities have returned 35 basis points less than U.S. debt this month through Aug. 27, even after narrowing the gap by 19 basis points last week, Barclays Capital indexes show.

That’s the worst relative performance since November 2008, when the securities underperformed U.S. debt by 68 basis points amid the depths of the global financial crisis. Last month, the bonds returned 44 basis points more than Treasuries.

In emerging markets, relative yields versus government notes rose 13 basis points to 296 basis points, the highest since July 22, according to index data from JPMorgan Chase & Co. Spreads for the month rose 11 basis points after declining 53 in July.

Australian Banks

Spreads on bonds issues by Australian financial companies have widened to 215 basis points on average from 209 on June 11, while the gap for bonds issued by similar borrowers around the world has narrowed to 224 from 256, according to Bank of America Merrill Lynch index data.

Home prices in the most populous cities of Melbourne and Sydney climbed 24 percent and 21 percent in the year to June as Australia continued almost two decades of uninterrupted economic growth, statistics bureau data show.

Australia’s ratio of household debt to disposable income was 157 percent as of March 31, central bank data show. It was 133 percent in the U.S. before the housing collapse began in 2007, according to the Federal Reserve Bank of San Francisco.

“I’m not persuaded by arguments that houses are sustainably priced, I’m not persuaded by the view that debt is not a problem, and I’m not persuaded that policy-makers could prevent collateral damage to banks,” Gerard Minack, chief strategist for global developed markets at Morgan Stanley’s Australian unit, wrote in an Aug. 17 report. “Dodging the worst of the global financial crisis didn’t demonstrate that there’s no bubble, in my view it just showed we dodged the prick.”

Borrowing Costs

Rising borrowing costs are a “revenue headwind” and may remain inflated for 18 months, Gail Kelly, the chief executive officer of Sydney-based Westpac, said when the lender reported quarterly earnings this month. They will be “permanently” higher, said Mike Smith, ANZ’s CEO.

Omega Global Investors Pty Ltd., a fund management firm based in Melbourne, bought Macquarie Group Ltd. bonds in July and August from U.S. and European investors concerned about a housing slowdown, according to Investment Director Mat McCrum.

“Australia’s increasing population and limited supply make the market very different from the U.S. and Europe,” McCrum said in a telephone interview.

Australia, a nation of 22.4 million, faces a housing shortage and needs to build about 420,000 more homes in the next decade than it did in the last, according to Harley Dale, chief economist at the Canberra-based Housing Industry Association.

Home Costs

The median cost of an urban home was A$465,000 in July, research by real estate monitoring company RP Data show. The median price of a new home sold in the U.S. that month was $204,000, while sales unexpectedly dropped to the lowest on record, according to Commerce Department data published Aug. 25.

National Australia Bank priced $1.25 billion of three-year, 2.5 percent bonds in January to yield 87.5 basis points more than Treasuries. The spread has since widened to 105 basis points, according to ANZ.

The extra yield investors demand to own Westpac’s $2 billion of five-year notes instead of Treasuries widened to 144 basis points yesterday from 137 basis points when sold on July 26, Citadel Securities prices show. The spread on Commonwealth Bank’s $1 billion of 5 percent 2020 notes sold in March surged 27 basis points this month to 158, according to ANZ.

Investor demand for corporate debt globally will support Australian bank bonds, said Mark Kiesel, global head of corporate bond portfolio management at Pacific Investment Management Co. The Newport Beach, California-based firm oversees the world’s biggest bond fund and is among the largest holders of Australian bank debt.

‘Most Attractive’

While that may benefit the securities, “when we look around the world, the most attractive banks from a valuation perspective are U.S. and U.K. banks,” he said.

Investors have allocated $480.2 billion into debt mutual funds in the two years ending in June, according to data compiled by Bloomberg and the Washington-based Investment Company Institute.

Bank of America Corp., rated three grades lower than ANZ at A by Standard & Poor’s, priced $1.5 billion of five-year bonds on Aug. 17 to yield 230 basis points more than Treasuries, according to Bloomberg data.

Similarly-rated RBS, the U.K.’s biggest state-owned bank, sold $1.5 billion of 2013 notes at a 265 basis point spread, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.


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billt
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Thursday, September 02, 2010 - 08:38 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)



Nouriel Roubini, RGE, stated today there is ‘No Chance of a V-Shaped Recovery’. The curtain has opened on Act Two of our “Year of Two Halves”—RGE’s theme since the end of 2009—with the slowdown forecast for H2 2010 getting here a bit earlier than expected. Growth in Q2 2010 registered a very weak 1.6%, revised down from an original estimate of 2.4%—a sharp slowdown from the 3.7% of Q1. This implies much weaker growth in H1 than even bearish forecasters had expected. Moreover, most of the growth was driven by a temporary inventory adjustment; final sales grew a mediocre 1.1% in Q1 and 1.0% in Q2.

Meanwhile the jury is still out at the ECRI – perhaps an ‘each way bet’! Economic Cycle Research Institute (ECRI) puts the chance of a new recession at better than 50%. But he also says there's a good possibility that we'll have a "soft landing" in which the economy does not actually start shrinking again.

Employment figures due out Friday may not provide any upside. U.S. private employers unexpectedly cut 10,000 jobs in August compared to a revised gain of 37,000 in July…. expect a fall in overall nonfarm payrolls of 100,000 in August.

But hey, the White House knows the answer! ‘White House economist Christina Romer says the government has the tools for bringing down unemployment, but policymakers need to find the will and wisdom to use them. Romer called on officials Wednesday to move forward on policies that will increase government spending and cut taxes.’

Oh good, more deficit and debt…. why didn't someone think of that earlier!!


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paint
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Thursday, September 02, 2010 - 09:07 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)



Good morning all,

Some comments for the UBS Technical Team (24th Aug) who are very much on the pulse... they expect a potentially meaningful bounce into Sept before the next leg down late Sept/early Oct...

US Trading: Right in line with our cyclical models, the SPX has met a new reaction low so the underlying technical picture in the US remains negative. With headline indices (NDX /DJT) and key sectors (BKX/XBD) testing crucial support levels, the market is sitting on the edge. A break of 2159 in the Nasdaq and 4200 in the transport sector would call for another sell off short-term. With trending studies in short mode and cyclical momentum indicators still far from oversold levels, we see the risk of a negative overshooting before we could see a meaningful bounce into early September and/or Labor Day. Support in the SPX is unchanged at 1056 and 1040. Potential strength into early September we would sell. We remain negative on cyclicals and financials.
US Strategy: On August 12, the US market generated a first Hindenburg Omen (HO). Last Thursday there was a second signal, so that a confirmed HO is now in place. As one of the major patterns in technical analysis, a HO has a superb track record as a leading indicator for substantial corrections, which fits our general view of the markets. So although there could be a meaningful bounce into early September, as long as the SPX is not able to break its August 9 reaction high at 1129, we continue to see the risk of another significant (10% to 15%) correction leg in equities. Our preferred timeframe for this correction is the second half of September and early October, where we continue to see the next major tactical buying opportunity for equities.
European Trading: Most European headline indices have broken the May/June up trends and after posting the second consecutive bearish weekly candle, the focus is on the next lower support levels, which is the 2586 in the Euro Stoxx-50. On a very short-term basis, we expect more downside but given the increasingly oversold readings in momentum indicators, a stabilization and bounce attempt later this week/at the latest early next week is likely. However, even if we see a more meaningful bounce into early September, in the second half September we expect more losses based on higher market activity, so playing a bounce next week is in our view only something for aggressive accounts.


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paint
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Thursday, September 02, 2010 - 09:10 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)



This UBS view seems to tie in with Rudy's EW thread


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market_mad
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Thursday, September 02, 2010 - 11:53 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,

Very important technical levels around here. If we break through 4598 on the XJO, I'll be buying up and targeting a push towards the 5000. As long as that level holds and doesn't break through, then this is a corrective rally within a bear market.

Just my views

Cheers
MM


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ody
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Thursday, September 02, 2010 - 12:10 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)



MM: bonds and markets

I like your long piece on bonds, MM, but worry that you might be wrong to expect 5000 - that seems to me too much too soon, and fraught with risk.

The market went up significantly yesterday on the basis of higher figures for consumption than had been expected. This higher level of consumption is due, I believe, to two things - both obvious if one reflects on them: (1) high national income from mining, and (2) stability of interest rates.

The RBA will not tolerate the present pattern to continue - of that I feel quite certain. If I can see this, so will others, and as prior to this last bout of buying Australians had grown coy about spending their money we are looking at a very artificial and temporary situation, which is quite "counter-intuitive". Investors will be suspicious of this sudden rise in our market, and see it as having a very shallow and temporary base. We will soon see a good many people worrying about a rise in interest rates. As well as, ongoingly, the international situation.

Much uncertainty in fact remains, and the sudden burst of market enthusiasm can turn on a dime.

The following piece from the Australian does, I think, correctly express concern that interest rates will, as a result of the current buying spree in Australia, be moved up. And in any case, we are in a general market situation where a sudden high jump like yesterday's usually does not get sustained for long. I don't mean we cannot go up - rather, it's a matter of by how much. And for how long. You'd have to time the market very exactly.
------------------------------------------------------

Watchful RBA eye on consumer figures

* Michael Stutchbury, Economics editor
* From: The Australian
* September 02, 2010 12:00AM

WAYNE Swan is right that many other treasurers would kill for a set of economic numbers such as Australia's.

But the Reserve Bank of Australia won't share his enthusiasm over signs of stronger consumer spending.

Until now, the economy's script was based on growth returning towards its sustainable trend rate of just above 3 per cent, inflation falling into the Reserve Bank's target zone, the jobless rate just above 5 per cent and interest rates on hold.

But the script also calls for cautious consumers to pay down their debts rather than spend. That lines up with the heavy discounting required by department stores to get shoppers to buy.

Instead, yesterday's numbers show that household consumption was the main driver of the economy's stronger-than-expected June-quarter expansion as consumers splurged on cars.

Contrary to Reserve Bank hopes, the household saving ratio fell.

And that increases the risk that the huge surge of national income from sharply higher iron ore and coal prices will push the economy too quickly towards full capacity next year.

That could stoke inflation, which has just eased into the RBA's 2-3 per cent target.

While the economy boosted its output of goods and services by 1.2 per cent in the June quarter, the income from this production jumped 4 per cent in real terms. This is the biggest quarterly increase in gross domestic income since 1973.

This income splurge will pump up company profits, tax revenue, jobs and household income just as the mining investment boom hits its straps next year.

One of the Reserve Bank's main tasks now will be to stop higher household income feeding into stronger consumer spending. It has only one weapon to do this: higher interest rates to encourage Australians to save rather than spend.


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market_mad
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Hi Ody,

Don't worry mate - I'm still bearish and just wanted to point out a couple of technical levels that are very important.

I think that as long as we hold below those levels that the market will go down during Sept and Oct.

Cheers mate

MM


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ody
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Thursday, September 02, 2010 - 01:23 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)



MM, - I am reassured.

Here is another interesting piece which makes me feel cautious. This time from the SMH.
-------------------------------------------------
Trade surplus shrinks as exports retreat
Chris Zappone
September 2, 2010 - 11:40AM

Update Australia's trade surplus almost halved in July, as coal exports declined to China and India, taking off some of the recent momentum on the international front.

The trade surplus fell to $1.89 billion in July from a revised $3.44 billion in June, according to the Australian Bureau of Statistics. Analysts had expected a $3.1 billion surplus for the month.

Goods and services exports dropped 4 per cent, or $1.19 billion, to $25.4 billion, while imports rose 2 per cent, or $359 million, to $23.5 billion.

Today's surplus drop ''doesn't alter the underlying the picture of a strong turnaround in trade accounts over the last six months on the back of strong commodities prices,'' said Commonwealth Bank senior economist John Peters. ''Six months ago, we were running large monthly deficits.''

The monthly trade data measures the merchandise and goods and services imported and exported from Australia, comprising a large part of the current account balance.

Data released earlier this week, showed the current account balance improved nearly $11 billion to a deficit of $5.6 billion in the second quarter, the narrowest since December 2002. Goldman Sachs estimated the quarterly move was the biggest relative shift since the June quarter of 1961, when Japan's rapid industrialisation help drive demand for Australian commodities.

Yesterday's national accounts figures showed the improving trade position added 0.4 percentage points to the growth of the economy in the June quarter, or about one third of the total.

The Australian dollar eased back on the release of today's trade data from 90.85 US cents to 90.69 US cents before recovering some ground.

China, coal drop

A sharp decline in coking coal exports to China and India contributed significantly to the lower surplus for the month.

Exports were hit by a 27 per cent drop in hard coking coal volumes in July, more than reversing a 9 per cent increase in June, ABS data show.

ANZ economist Riki Polygenis said exports of coking coal to China plunged 77 per cent for the month as the Chinese government closed 40 per cent of its steel industry for maintenance, denting demand for Australia's commodities. Coking coal is used for making steel.

Coking coal exports to India also fell, down 47 per cent, or $329 million, on the month before.

Moody's Analytics economist Matthew Circosta said the coal drop " does appear a little strange given that these economies are some of the best performing in the world right now."

"Nevertheless, rising investment in China and India indicate demand fundamentals are still strong, suggesting a rebound in exports of coal and iron ore in coming months," Mr Circosta said.

St George chief economist Justin Smirk agreed that the coal slide as probably a one-off, attributable to a bottleneck in production or a delay in shipping.

"We expect to see a recovery in the next couple of months," said Mr Smirk.

He compared the drop with a storm-flooding in Queensland's coal mines in February that hit coking coal volumes for the month, only for the decline to be followed by a recovery in March and a surge in April as production came back on line.

The impact of China's demand for Australian resources has been the primary force behind the latest commodities export boom, which began in 2005.

czappone@fairfax.com.au

BusinessDay, with AAP


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cat_lady
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Thursday, September 02, 2010 - 02:15 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

Ody's impressive stock selection

just tidying up my computer and I came across an old file which I'd put together to track some stocks which Ody had selected as worthy of holding around November last year.

having a spare few minutes I looked up the current prices of these stocks and thought people might be interested in the results.

I'm pretty sure that Ody WOULD have dumped clean seas tuna when they had the failure in their baby pens, but otherwise not a bad return. I've added the approx dividends for interest sake

also, I'm not exactly sure what price he paid for these stocks but it was the EOD price I chose when he posted that these were stocks he bought/was buying or would buy:

DMP +18.5% - 17.8Cents
DWS -3% - 11.25 cents
FGE +91.5% - 7 cents (I followed his advise on this one)
NVT +14% - 18.8 cents
RCG +10% - 3 cents
WEB +18% - 10 cents
SFY -3% - 124.52 (47% franked)
JBH -3% - 66 cents
WBC -14% - 60 cents (only 1 payment date)
CSS -50%


buy and hold may be dead but it shows that if you buy quality stocks and are patient, then going broke may be the least of your problems.

cheers
cat lady


Without my morning coffee I might as well be a dog

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cat_lady
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Thursday, September 02, 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)



so what have I been doing over the last little while? not so much short term trading. mainly back to the drawing board and focusing on valuations (a la roger montgomery), low debt, high (and growing) ROE, and (unlike roger montogmery) dividends!

I've been gradually remodelling my portfolios (super & personal) to reflect the change in my new or slightly amended investment style.

I have over the last few months added some new faces as well as old ones:

ORL, FGE, MCE, APA, EPX, MND, NBL, OZL, QBE, PTM, MRM, CBA

not to mention: AAZPB, CBAPB, MQCPA, SUNPB

Still Holding: SUN, DTL, BOW, TSE, WIL, ARG, ORG

Sold: IMD, TOX,- although they've been good to me, the latest results have ruled them out for the time being.

I should really sell SUN as well, but I think the turn around has come for them so will see what the future brings. ORG likewise continues to disappoint, market totally discounts its CSG exposure, and although it fails to meet my new requirements what's the point in having a rules if you can't break them every now and then? this one I'll hold on faith

have a good weekend all

cat lady


Without my morning coffee I might as well be a dog

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cat_lady
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Thursday, September 02, 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)



edit above

forgot to say I'm also still holding COH, WDC & IDL.

cat lady


Without my morning coffee I might as well be a dog

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ody
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Thursday, September 02, 2010 - 07:01 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 - my November list

What an interesting exercise, cat lady. I sold all stocks which I actually had no later than October (some already in September), so I regard the list which you quote as one that I would have put up for theoretical consideration if someone at that time was still interested in choosing stocks. While I may be "out" myself at a particular time, I recognise this is not necessarily what others would want to be, and I quite like trying to identify good stocks at just about any time.

CSS is a stock I actually did hold last year, along with Halcygen Pharmaceuticals. I bought these very intentionally as purely speculative - hence as small holdings. I made very good money indeed on Halcygen, and sold Clean Seas Tuna at the price I bought it for, minus or plus a very small amount. Certainly you are right to think I would never have kept that stock and allowed myself to lose 50% of the money invested in it.

The others are interesting to look at retrospectively as more "serious" stocks, and the one that surprises me a little is DWS, as I see that company as erratic. Perhaps there was some good news concerning it at the time, but for me this would have been a fairly atypical choice. I would very likely have sold it at some time, if, for example, someone had said in November: "You must select a group of X stocks (say, this number), and you may sell three (no more), but must keep the others." I simply think DWS is a more unreliable company than many others, even though it has some strong points.

SFY would definitely have gone: I bought that stock to take advantage of the fact that property trusts had gone so low that they became a buy, but I would have had no inherent faith in them.

The others, however, all still seem to me quite defensible choices, i.e. DMP, FGE, NVT, RCG, WEB, JBH, and even WBC. This would have produced 18.5% + 91.5 + 14 + 10 + 18 + [-3] + [-14]. Total return if same amount chosen for each would have been, if my maths is correct, 135 : 7= 19.28%.

Would I actually have proceeded this way? If compelled to invest for someone else, quite possibly yes. However, I can only GUARANTEE that to the extent that I would have not owned, or sold, CSS in November, and would most likely have wanted to sell DWS and SFY - both stocks I would at any time have been less than ideally confident about.

Where I might have failed is that I might well have found myself tempted to sell one or two of the others when I shouldn't. That would have been my potential weakness, as I err on the side of caution. The temptation would have been the stronger as I would have felt myself to be in a bear market.

Indeed, to an extent this argument is not even theoretical, in terms of my ACTUAL behaviour: the fact is that I would not have been in the market, as - in the event - I WASN'T. Therefore there is no point in my boasting about a result I might have achieved but didn't: I did not in any sense participate.

What I think I CAN say - and this, I think, is borne out by the figures AND events - is that I would not have had CSS, and, if investing for someone else who very much wanted me to and placed no restrictions one me, that I would have done a decent job.

And you are right: this does show what can be done in a market which in essence has gone sideways. I don't think it shows much about a true buy-and-hold strategy though (i.e. buy-and-hold OVER THE YEARS). It can well be argued that I went out too early, of course. But although I am no doubt too cautious, the fact is that I WAS in the market during 2009 when it made quite good money for me pretty easily (returning me 26% on a not inconsiderable sum); also, that I was almost totally out of the market during 2008, when it would have lost me a lot of money, and so on.

In other words, I do feel I have proved the (true) buy-and-hold people more often wrong than right. I point out also that, although I did not make 19+% during the period you mention, as indeed I MIGHT have done (we'll never know), I was still making a total amount very close to 8% (including grossing up on my hybrids) with very little risk. So, although I was perhaps too cowardly, and should maybe have trusted my own capacity for choosing winners more, my playing it safe did not prevent me from still making money, and there is, after all, no guarantee that I would, in fact, have made that 19+% if I had stayed put.

I grant, even so, that probably I do err - on the side of caution - rather than getting it right as much as some do. I believe that my fabled nephew, for example, though never using e.g. EW analysis, and acting very much as a "natural" picking ALL significant signs ably, will have made significantly more money than me. However, his record is truly astounding and abnormal. I think very few people have that kind of talent. Talent it is: without it, and no matter what other method one chooses, one is not likely to come close to a person of that nature. He has a real "feel" for EVERY important factor in the economy and a market, and how things will play out, without using any "system" whatever.

I do think I share SOME of his ability, in that I certainly do have great flair for picking good companies and rejecting poor ones. Indeed, in that respect - as your post also shows - I am well above average. In fact, I can probably trust my ability in this regard more than in fact I do, as if anything I do sell good companies too early, and they have a habit, in many cases, of later showing me wrong.

My timing of the market is certainly not as good as my nephew's, as he is able to get matters right almost to the day, time and again, defying almost all professional analysts. And he does this short-term and long-term. Even during individual days. In this respect I only get things APPROXIMATELY right, which is a reason why I rather crudely choose certain fairly longish periods for being in or out of the market. I have no doubt that the one thing which all good investors have in common is self-knowledge enabling them to do well because they know what they can and cannot handle.

I am less gifted than my nephew, and recognise that, so I don't try to do what he does. On the other hand, I do with reasonable confidence and ability pick longish periods for being in or out; and when it comes to choosing and managing individual stocks in bull markets I know I am strong. The ability to choose stocks unsurprisingly also carries over during periods when I am out of the market, as your post demonstrated.


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cat_lady
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hi ody

just checked the IC forum and I must have made a mistake in adding JBH, WBC and CSS to the list of stocks you bought in November (see your post of November 9, 2009 in the archives) in which you indicated you'd bought back in in a small way the other stocks. not sure why I included JBH, WBC and CSS unless maybe they were ones you'd commented on earlier in the year before selling out. Looks like your results would have been even more impressive!

cheers
cat lady


Without my morning coffee I might as well be a dog

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ody
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cat lady: thanks

I didn't even remember I actually bought stocks on 9 November. I have gone back to that post, and yes, there they are. I often do spend a smallish amount on a bit of a "foray" into the market when even so "in essence" I am out. You are right, though, the ones I bought on that day were rather a good choice - and would have remained so!

Without going into matters thoroughly, I have no idea when I sold them. Our accountant has a record of all sales and purchases, and calculates at the end of each tax year how we have fared: that is how I know that I have made a profit (and the size of it), each year, since I decided to manage ALL of our capital myself, with my wife's strong encouragement.

She'd had had enough of ANY "help" provided by so-called "financial advisers", and felt sure I'd do much better than they. She certainly proved right. I recovered all the losses they had inflicted on her own capital, and made large gains for her during the bull years so as to make her FAR richer than she'd been at any time before. As I often say, I invest for widows and orphans. But not merely by not ruining their capital: I keep enlarging it. Sure, I suffer minor losses here and there, but the gains far outstrip these. Not just by choosing better-than-average stocks, but also by hanging on to gains and cutting losses short. That is my main strategy in bull markets. I extend the reasoning in that I expose a lot of capital in bull markets or "safe" bear market rallies; and staying out when matters are clearly bearish. That, in nutshell, is my very simple approach to matters, and for me it works.


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ken
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Friday, September 03, 2010 - 03:22 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)



Hello all,

An unusual day today with the ASX200 hardly moving and Small ordinaries up 0.9%. My stocks are up by 3.7% today - not a common occurrence, thanks to AND 31%, GRY 15%,IAU 9%, SFR 9%. I often find that my smaller stocks keep going for 2 or 3 days after what could be a peak for the main index XAO.


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ody
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Friday, September 03, 2010 - 05:16 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)



Overall prospects?

Ken: I think you are correct about the small stock behaviour that you describe.

Any readers: I post here the BEGINNING of an interesting and to my mind "correct" view offered in a Business Spectator article. I stress it goes on for much longer! But what I am quoting is (I think) interesting enough ...
--------------------------------

Abandoning a treacherous market

Karen Maley

Published 7:39 AM, 3 Sep 2010 Last update 10:00 AM, 3 Sep 2010


Anyone reading Paolo Pellegrini's farewell letter to investors hoping to find sweet, soothing words about the challenges of investing will be disappointed. Instead, the high-profile hedge fund manager has issued a grim warning of impending calamity.

A fortnight ago, Pellegrini – who rose to fame as the former Paulson & Co executive who helped the firm make more than $3 billion by masterminding a bet on the US housing crash – announced that he intended to wind down his hedge fund, PSQR Capital, and return money to investors. The fund, which gained 40 per cent in 2008 and 62 per cent last year, fell by almost 11 percent in the first seven months of this year. The July rally was particularly harmful for PSQR, causing the fund to drop almost 8 per cent.

In his latest report, Pellegrini points out that investors are caught in a tricky dilemma. They’ve lost confidence in the rally that’s been fuelled over the past year and a half by massive fiscal and monetary stimulus. At the same time, they can’t bring themselves to ignore the boost to corporate earnings that’s largely the result of that same monetary and fiscal expansion. Even worse, they know that governments may once again decide on extraordinary intervention. This leaves investors trapped between risks to the upside, and risks to the downside. “Realising that the positives are largely unsustainable, though, they stay ready to bolt for the exits at any moment. The result is a particularly treacherous and volatile market,” he says.

But while Pellegrini concedes that buoyant corporate earnings could prop up the market for a little while longer, “I remain convinced that the party has come to an end and equities will retrace further.”
----------------------------------------
[CONTD.]


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bridog
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Saturday, September 04, 2010 - 02:09 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 Cat Lady for bringing the conversation back to stocks. I have been actively trading for the past few months and have waaay too many stocks . . about 40 atm. I gotta spend 2 or more hours each week night researching, charting and making buy/sell decisions for the following day. No-life Bridog.

I share APA and MND (both just excellent) with you and have been in and out of PTM and MRM.

My investment style has changed over the last year or so and has been influenced by that astute, wily investor/trader Eugenio and also Ody, Rudy, Jaded and yourself, but I have not gone down the Fibonacci track.

Thanks to Ody for APA and ASZ, and Eugenio for AND in particular but many others as well.

Current holdings well into positive territory are:
AAC, AMP, AND (you beauty), APA, ASZ, AVO, BND, BPT (recent buy 63c), EXS, KGL, MND, NWH, NXS, PNA, TCL, TOL, TRS, WES, WOW.

Current loss holdings:
ERA, MCR, NHC, PEM, SIR, SOL.

Jury’s out:
AQR, AXM, CMJ, COU, DCG, DWS, FMG, GOLD, MTS, NVT, PAG, PMV, SDM, WPL.

Eugenio will recognize his handiwork in some of the above.

Interesting (to me anyhow) looking at the loss holdings . . they are all “heritage” stocks that I have held for a long time, prior to my current trading paradigm. I can’t seem to quit them altogether. In general, Jury’s out stocks will eventually be sold if they don’t perform (well maybe not WPL).

Cheers all

Bridog


Old enough to know better . . .

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eblode
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Sunday, September 05, 2010 - 01:23 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)



Bridog,
Happy we did OK with AND.
I expect we shall do better with EXS.

"Wily" Eugenio


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eblode
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Monday, September 06, 2010 - 11:57 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)



Bridog,

Bought CZA if you're interested.

Eugenio


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paint
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Sounds like a plan Eugenio... I'm buying today


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ody
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Monday, September 06, 2010 - 06:36 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)



XAO

Interesting to find this at 4615. If it tries to struggle further, it may well fall, as it has in recent times done twice. If, on the other hand, it manages to get well beyond those two instances, that would be an important psychological break. Not that that would guarantee the hoped-for 5000, of course. But, as Rudy has pointed out before, September can be a positive month. Personally I think something like 5000 is very improbable in the short term, though of late there have been a few good bits of news, including US news.


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rdumas
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Hi Ody,

Not sure where I said that September can be a positive month. I am sure that it can be but the last post that I did about September was that it was traditionally the worst month for the DOW.



I in fact still consider that September 2010 will end up being a very bad month but because of the Triangle pattern that has formed on the XJO I anticipate that the my anticipated low for the April correction in mid to late September will spill over now into October.


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, September 06, 2010 - 08:02 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)



hi Ody

...."a few good bits of news, including US news"??

“David Rosenberg: Here's 5 Signs That The Economy Began The Double Dip In Q3

He's been saying for awhile that Q3 GDP would book a negative print, and today he adds to his list of reasons why:

We are currently seeing a discernable slowdown in the third quarter, suggesting that GDP growth be contracting (versus the 2.5% penciled in by economists) or at the least, real final sales. Consider the following Q3 momentum numbers:

1. Real personal income excluding government transfer: flat to slightly negative

2. Real personal spending: up at 1.3% at an annual rate, a slowdown from the already tepid 2.0% in Q2

3. Housing starts: -32.0% at an annual rate

4. Real non-residential construction: flat

5. Non-defense shipments excluding aircraft: -1.2% at an annual rate, Q2 was +17.5% ”

End

Here are a few more of mine to add 10 more to Rosenberg’s list:

6. U-3 Total unemployed, as a percent of the civilian labor force (official unemployment rate) = 9.6% and rising.

7. U-6 Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force = 16.7% and rising

8. GDP falling 2.4% to 1.6%

9. National Debt $13.4 trillion and 93% of GDP and rising

10. National Deficit $1.3 trillion and rising

11. Food Stamp Recipients 41.9m and growing

12. Auto Sales at a 28-year low in August

13. Sales of existing homes plunging by a record -27 percent in July (5.26m to 3.83m), housing starts were down - 32 % in July. Building Permits fell - 3.1% to 565k Rate in July hitting a 14-month low

14. ISM Services down from 54.3 to 51.5

15. Chicago PMI down 62.3 to 56.7

I try to avoid listening to pundits on the television, and study the actual facts...they are a continuing source of immense worry.

"Even if the US and European economies manage to avoid a double dip, it will still feel like a recession, while more than half of the 800-plus US banks on the "critical list" are likely to go bust, according to renowned economist Nouriel Roubini of Roubini Global Economics.

The second half of the year will remain weak as tailwinds become headwinds, Roubini told CNBC on the shores of Lake Como, Italy at the Ambrosetti Forum economics conference.

"In the second half, fiscal policy becomes a headwind, no more cash for clunkers," Roubini said. "The positive scenario is that growth will be below par."

Roubini recently said the chance of a double-dip recession in the US was now more than 40 percent.

"The big risk is that there will be a downturn in markets that could impact the bond, the equity and the credit markets," he said.

“Job losses have been higher, the US jobs number will show that. There is no private sector jobs growth," he said.

"Consumption is weak, exports are weak and housing is weak."


Ody, I am not sure were this will end....it is not pretty!


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eblode
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Gentlemen & Cat Lady,
I just can't believe it! All I hear is gloom and doom. Double dips and " I"m not sure where this will end....it's not pretty!". Rubbish! We are at the base of the greatest bull market we shall ever see. Thank God I don't take those warnings too seriously as it would of cost me a fortune over these past weeks. If the Abbot government comes in today we're flying towards 5000. The United States is going to start generating it's financial power and get production and labour moving very shortly. Buy solid companies and just hold on for the best ride of your life. That's what I'm doing and just riding the money trail and forget about
double dips, and 3800 levels. This is the time to get set for the opportunity of a lifetime. Just pray Abbot wins the election today..

Eugenio


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billt
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Tuesday, September 07, 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 again Ody

A piece in the UK's Telegraph worth the read:

No defence left against double-dip recession, says Nouriel Roubini

http://www.telegraph.co.uk/finance/economics/7981334/No-defence-left-against-dou ble-dip-recession-says-Nouriel-Roubini.html


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billt
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Tuesday, September 07, 2010 - 08:34 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 Eugenio

I express a view, supported by facts, that the USA is continuing to experience a prolonged period of economic concern and decline.

Internationally respected economists like David Rosenberg, Nouriel Roubini and many others are reminding us that the US economy is in trouble.

I have listed 15 leading economic indicators which are all in retreat. The US Congress are about to consider more 'Stimulus' to try to revive the economy. That doesn't sound like they feel as confident as you.

The Chairman of the United States Federal Reserve has only quite recently stated we are in 'unusually uncertain' economic times and the Fed is ready to 'do whatever is necessary' to avoid a further decline. That doesn't sound too bullish!

How do you support a claim that: "The United States is going to start generating it's financial power and get production and labour moving very shortly"? Is this just 'an idea' or do you have any reasoned argument supported by fact?


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market_mad
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Tuesday, September 07, 2010 - 09:20 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)




eblode wrote on Tuesday, September 07, 2010 - 08:10 am:

We are at the base of the greatest bull market we shall ever see.




Hahahahahahahahahahahaha!!! Pick me up off the floor!!! I thought it was April 1st for a second there!

MM


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eblode
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MM,
It's nice to see you have a laugh while you've been on the sidelines for months
breathing doom and gloom instead of picking up $$$$$$$$ in these past few weeks. Keep it up. Laugh again tomorrow when the DOW goes up after Obama's Labor Day speech which will again encourage the market to head north. Some guys are in the market for laughs, others to make a buck. I know which side I'm on.

Eugenio


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market_mad
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Don't worry about me Eugenio - I've made more money in the past few months than I've ever made... laughing all the way to the bank my friend.

It's a worry is it not, when you have to rely on Obama for the market to go up and not on the back of 'good' economic numbers and positive signs that the US is in fact turning it around.

I always love it when you get bullish - time for me to load up on some shorts again - hahahahaha

Cheers
MM

PS Do you want my address now to send that bottle re the AUD bet we've got going??


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ody
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Rudy: September

Sorry: I was thinking of the wrong month!! We are agreed that even if there were to be some more up days the global situation is such as to make a significant fall likely. It is the latter one should concentrate on, not any possible rally, if one wants to protect one's money.

Bill: re "positive signs". Overall, I agree, of course: there is FAR more bad news than good. And I don't think that even our own local tidings about e.g. strong export numbers will protect us: these HAVE BEEN strong, but there is no guarantee that they will continue to be, as the strength was based on exceptionally high prices for coal and iron ore. And a different situation globally, notably China.

As you will be aware, both of you, my own attitude is, and has for months been, in essence consistently bearish. All along, while out of the market for several months, I have acknowledged the possibility of the odd rally, but equally consistently I have persistently argued that with the world economy facing grievous problems any rally could only be inherently weak and/or short-lived (the April high was to my mind surprisingly strong, but it did, indeed, not last).

So, yes, Bill, I am on the side of Roubini etc, as indeed I also was already in 2006 at the time when he was openly laughed at after delivering his view at an important conference. His analysis - and no less the stupid reaction to it - prompted me to sell a first portion of shares as early as February 2007, when Chinese markets tumbled on fears about debt. That event for me was proof that Roubini and the other 2006 bears "had got it right", and that it could only be a matter of time before markets collapsed.

I still do not think we shall get a repeat of 2008, but I certainly think we shall see a fall, and I must say to Eugenio, my dear friend: "Try to ANTICIPATE where the market goes, Eugenio, don't just FOLLOW it. If you look ahead, the signs are bad."


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ody
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Bill: US stimulus

I would add that not only the thought of more stimulus proves that the US economy is worryingly weak, but that it also shows that in once again entertaining the thought that spending more money will help that economy the US authorities show that they have learned NOTHING from their own ongoing failures. They are still trapped, mentally, in believing that the US is essentially invulnerable, as Eugenio appears to think, and that everything can continue as before. Yet they are now definitely at the crossroads. If they STILL cannot comprehend that they are constantly creating bubbles which will inevitably be followed by crashes, and that they are not actually creating an economy based on work as distinct from speculation, they will merely continue to create further and more and more damaging disasters.

The way I see it, this IS the US mindset. I think they have indeed not learned, and won't. They are in essence beyond redemption, in their present state of mind. Even any new technological invention, for example, still would not eventually see them through, as what is required is a new mindset to the effect that you must live within your means and actually WORK to earn your keep, not speculate in the absence of jobs, things made, a diminishing amount of industrial activity, etc.


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market_mad
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Tuesday, September 07, 2010 - 01:55 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)



Katter sides with ALP, other 2 to hold news conference at 3pm

Cheers
MM


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rdumas
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Hi MM,

Sky News is reporting the opposite. He has gone with the Coalition according to them.


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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Here is the report on the ABC website verifying my last 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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p3t3
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Business Spectator is confirming Rudy's post, Katter to support Coalition.


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market_mad
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Tuesday, September 07, 2010 - 02:14 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)



Sorry Rudy - that is what I meant!


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ody
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Yes, Rudy, you are of course right. "The Australian" has quite a bit about it already, saying that this in a way seems to complicate matters, and it MAY be necessary to go back to the polls. The idea had been that all three would give a press conference this afternoon, and increasingly, since last night around 6.00, speculation had it that all three would now support Abbott. That was for one thng because the three wanted to be sure that Mr Crook would actually support the Coalition, as, if he didn't, there might be trouble. Crook promised support, and this appeared to indicate that "the three" would feel reassured. The had also, earlier, worried about creating a "dead heat". It is now theoretically possible that the other two will join Gillard, in which case she would have just ONE vote to spare. If that does not happen, then, with the two moving to Abbott, there would clearly be a government. But it may not be as simple as that ...

Whatever comes about will, of course, in any case be shaky. Whoever governs will have a poisoned chalice. However, Abbott would have the opportunity to build up incumbency, which would strengthen his hand immensely, whereas Gillard's position would most likely prove unsustainable. Indeed, as she could now get only a one vote majority one cannot see her lasting long, even if the two remaining amigos supported her. Or such is my assessment, anyway.

I always thought that Katter could not possibly support Gillard. Oakeshott is to my mind somewhat of a crypto-socialist; and I do not like Windsor calling on his Labor cousin to advise the trio. So all along I have tried these two less, though I would have thought Windsor would be more likely to support Abbott.

However, the fact that Katter has "gone it alone" suggests fairly strongly that they will NOT work as a trio, which means that there will then be disunity in any case. Or perhaps the other two will still do the "right" thing (pun intended).


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ody
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Tuesday, September 07, 2010 - 02:32 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)



But wait, there's more!

The SMH reports that Katter will change his vote if the other two go with Labor, "for the sake of unity" (or words to that effect). He feels that otherwise he would cause an impasse. That would certainly be so if those two actually split.


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billt
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Thanks Ody for your input. I agree with your analysis.

There does seem to be a growing group of US politicians that are coming to the view that a significantly different set of policies will need to be implemented to turn the American Machine around. Whatever the outcome on policy I can only see low or negative growth in the US for the foreseeable future.

I was out of the market during the 2008 crash, back in for the 2009 rally, and bailed out at a similar time as you later in 2009. Since April I have only been interested to trade on the 'short' side on the NYSE, and that strategy has paid off handsomely. I prefer to align my trading strategy to the main US economic trend and not fight against it.

I do not seek to persuade anyone to follow any particular trend, and hopefully Eugenio and others that are trading the long side find equal success.


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ody
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Tuesday, September 07, 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)



Labor it is

Katter is apparently staying with the Coalition despite the SMH claiming otherwise, but the other two have betrayed their electorates and joined Labor. What a wonderful future we are facing!


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p3t3
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ody wrote on Tuesday, September 07, 2010 - 03:44 pm:

....the other two have betrayed their electorates and joined Labor. What a wonderful future we are facing!


I'm more inclined to be agnostic about the outcome, though with the extra $10 billion for Regional Infrastructure it looks like a particularly squeaky wheel has been well and truly greased. Those electorates might see some serious infrastructure spending to ease any lingering feelings of betrayal.

NBN to proceed, pre-election agreement with TLS to remain in place. Implementation to be prioritised in the Regions and slowed in Metro areas. Looks like a fairly neutral outcome for TLS, SGT, IIN and others in the Telecoms space.

Mining Tax to proceed, but look like a tough road to implementation, with the Greens wanting to punish the Miners further and the independents able to block anything they don't like in the House of Reps. With the Chinese pulling back from US Treasury purchases and towards hard assets, such as stockpiling commodities, demand for mines' output looks reasonably stable.

For stocks more generally, uncertainty to continue with the greatest risks coming from offshore, rather than domestic issues. Apart from the likelihood of further interest rate increase(s) before the end of the year, which would likely affect both Housing and consumer spending (WOW, DJS, HVN, JBH, WES etc). Not within the ambit of political control though, with a genuinely independent Central Bank.

Doesn't look particularly threatening to me.

Just my view
Pete


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cat_lady
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oakeshott wants to revisit the MRRT, his comments about the "good work" done by Henry indicates to me that he would not be averse to an expansion beyond iron ore etc. he will find no opposition with his fellow greens, sorry independents. sovereign risk may well be back on the table.

there is no way I can see any stability coming out of this union. likewise I couldn't see any stability if they'd jumped the other way. we need a new election and optional preferential voting!

cat lady
p.s. oakeshott is the one who wants to limit parliament speeches to 4 minutes, yet took nearly 45 minutes to deliver his own today


Without my morning coffee I might as well be a dog

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ody
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p3t3: Whither now?

Like cat lady, I find myself thinking immediately of the mining tax. While there very many things that Rudd did poorly, this tax, supported by the Gang of Four, was to my mind the most mischievous and misguided policy he adopted. Gillard was the one who with her "Cut it, Kev" dissuaded Rudd to persist with his ETS, and his vote went down from there, but it was the mining tax which reduced his support so much that he entered into "unelectable" territory, enabling Gillard and the "faceless men" to knife him.

If there is one thing clear from all this it is that the mining tax was ultimately Rudd's undoing, without any shadow of doubt, and what Gillard put in its place was a very bad, uneven, hastily cobbled together compromise. With the Greens now effectively holding the balance of power - indeed THE power - in this country, they will attempt to coerce Gillard to adopt something like what she abandoned, and the result would be nothing short of disastrous for this nation. Already a great deal of money had fled overseas, both on the part of foreign investors, and domestic ones deciding to place their operations elsewhere. Furthermore, national income will shrink, as mining is, in effect, about the only truly strong part of our economy. Industry, agriculture, IT, etc, will in no way see us through: it is mining which helps us along, and that is now at the very same time the area which will be under attack from this new government, which, let us remember, will be even more hostile to, and ignorant about, economics than the previous one already was.

The 10 billion for regional Australia is a considerable amount. I happen to believe that regional Austalia IS badly treated, but I see no clear plan for improvement of that situation; don't know where Labor will get the money from; and on what it will be spent. What I DO know is that Gillard is not competent and careful when it comes to spending money on infrastructure, so one shudders at the thought of further likely waste.

The NBN is something that I support in principle, but I do not trust THIS government to put in place a system that is properly costed and effective at the same time. I think that, going by Labor's record, yet more money is certain to end up in the wrong pockets, and that once again the work will be poorly supervised.

A further threat, of course, is that this is NOT a government of "stability". Infighting within Labor is guaranteed; troubles between the Greens and Labor are likely unless the Greens get their way on everything (by itself a very damaging outcome); there are plenty of opportunities for odd votes from independents, etc.

So I certainly think it will be a very bad government, and not one that will gain the respect of business either at home or - especially - abroad. It is a radical left-wing agenda which the Greens will pursue, and nationalisation is once again a very real risk, as that is what the mining tax is largely about.

With the international economic situation very uncertain, a government of this nature is not at all appropriate. The voters chose for Rudd in 2007 because Howard stayed on for too long, and because always, when a country is prosperous, a left-wing government looks like "something we can afford". Meanwhile, however, Labor has run up a very big bill, and our circumstances are far less favourable than in 2007. Many voters recently responded appropriately: indeed, the primary vote AND the two party preferred vote AND the seats gained by each side of politics indicated a narrow Coalition victory. The horse-trading that ensued has of course in no sense done justice to that fact. But the vote of the people of Australia expressed a shift to the right which if circumstances deteriorate further will only increase. Abbott may actually face a better future than he would have done had HE acquired the poisoned chalice, for if we see bad outcomes from here on, we all know which government to blame. That's the one thing truly positive about this outcome: it will expose the Greens and Labor. The one important loss for Abbott is that he can't acquire incumbency.







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p3t3
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ody wrote on Tuesday, September 07, 2010 - 06:55 pm:

p3t3: Whither now?


Not too far, and not very quickly, from what I can see.

It is extremely unlikely that the Mining Tax will be made more radical. It was South Oz Premier Mike Rann who approached Gillard and said the (BHP's) Olympic Dam expansion had been put on hold...."you can't do this" (the original MSPT). Gillard was able to negotiate, at short notice, an outcome acceptable to the Big miners. It is just those negotiating skills that will allow whatever political progress can be made to proceed.

Very unlikely Gillard will allow Greens pressure to apply a more radical outcome. Plenty of Labor members oppose even the current outcome. Much more likely the Tax would fall over altogether as Labor members with mining income in their electorates consider their positions, in a Parliament much less susceptible to bullying by the Executive. WA members are likely to be particularly sensitive given the swing against them after the original MSPT.

As negotiators go...Gillard, 1....Daylight,2.....Abbott, also ran. Negotiation will be a critical skill for anything like stability in Government. International perceptions will depend on outcomes. Many countries have minority governments, not the least Germany. They can be made to work.

Radical left-win agenda? Policies in the campaign were extremely difficult to separate. Anybody wanting to be re-elected is not going to do anything too rash.

For economic stability China (and the rest of the Asia-Pacific region) is way far more important to us than the US or Europe, though those two economic regions are important sources of demand for the Region's manufactured output. Demand will be constrained at the margin, but is extremely unlikely to fall to zero.

Just my view.
Pete

 
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