Where do we go from here?

After a 20% run in month, where can the stockmarket possible go but down? The smart money must be getting short. Unemployment, despite recent figures is rising, business investment is down. The aussie taxpayers have been lumped with about $3000 each of Rudd government debt. I'd have thought it was a fairly simple trade to get set short and wait for at least a 10% retracement. Shorting of financials should end on the 30th of May and once that happens it seems likely that financials doing massive capital raisings (Macquarie Bank) will come under significant pressure. If it's trading anywhere north of $30, then sell sell sell.

Is there any Life in this old Dog?

The machinations of Brisconnections and Nicholas Bolton, the TARP, the Geitner Plan, Kevin Rudd's 'Free' money. There's any number of schemes underway designed to restore faith in the markets, but will they do anything? What's the point? To me, they all seem a little misguided.
Take the Kevin Rudd plan. What is the point of handing out cheques for $900? These cheques can and do go to anyone. We've already seen that some of them have gone to people who've never even been to Australia. They've gone to people in prisons etc. Why not simply reduce tax, so that people who already pay tax, will have more disposable income and/or increase pensions. Doesn't that do the same without the ridiculousness created by the 'free' money campaign?
Maybe the point is that it's far more visible to hand out $900 cheques than to simply reduce tax. Rudd, stop with the stupid stunts.

I hate to say I told you so....Bris Connections

The 7.30 report has a great story about the great Brisbane highway robbery carried out by MacBank. Seriously the mispricing carried out by Macquarie on this deal should be a criminal offence. Awful

Time to Take Stock

Phew, it's all over....or is it? Central Banks around the world have conspired to pump some liquidity back into a market that had completely dried up. These facilities, most of which are swapping arrangements, swapping government debt of mortgage backed securities are design to rid the market of the 'toxic' MBS and CDOs and everything else that has been clogging up the system. It's a good idea and it needs to be done, but does it put the debt and equity markets back on track? In my opinion no. It is necessary, but it doesn't change the fact that the world is/was massively over leveraged and needs to de-leverage. It will takes months to get the liquidity and confidence back in the markets. Equity markets may rally for a week right now, but that doesn't mean it's time to dust of the margin lending account and get straight back to it. It's time to identify strong macro economic themes that will drive the global economy forward. What goods are people going to need in the future? Which goods will they need more of and who is best placed to benefit from this?

What's Going On?

Banks aren't lending to each other. LIBOR is a farce set to minimise derivative exposure, cash rates are not reflective of reality and the DOW on 5 times earnings is about 5000....so Half of where it is currently. The best things to own right now are tins of food and weapons.

So what to do?
Sell everything that has a large debt component that needs funding. Purchase Woolworths (maybe) and convert the rest of your assets into gold and or non perishable food. It's all over folks. It seriously is.

More or Less Sums it all up

Credit crisis explained

Holy F****** S***, You Idiots.

ASIC are idiots. Plain and simple.

If they think a ban on short selling will lower volatility and stop those 'nasty' hedge funds from profiteering from a bear market they're wrong. It's like they set their fiscal policy from whatever David Koch is saying on Sunrise.

Let's say you run a conservative little portfolio and you're long a few RIO.AX calls and you want to hedge your position by shorting some stock. You'd be doing the low risk, conservative thing, but now that those geniuses at ASIC have banned short selling, they prevent you from hedging your position, thereby increasing your risk, potentially forcing you to exit your position or even worse to sustain massive preventable loses.

How does ASIC decide what price level in the market is low enough that they can ban short selling? How do they know what represents fair values? They don't. What if the market is overpriced? (which it is)

If you run a super fund and you're getting smashed on your long market position and you want to buy a few index puts, are ASIC going to ban that too?

Seriously, the petty jealousy from the grubby little sneaks at ASIC has gone way too far and they have massively overstepped the mark. Their stupid over reaction caused a massive bounce in the market today (up more than 4%) and clearly didn't lower volatility.

We used to have a relatively free market Krudd and Co. The only other place they banned all forms of shorting was in Russia.
Next thing we'll be standing in line for soup and Brain surgeons will be paid the same as Ditch Diggers.

Why doesn't ASIC ban long only trading because a nasty hedge fund might buy up all the stock, artificially forcing it higher? That's just not fair, profiting from a rising market. They've got to start thinking.