When you go through hell, keep going
November 21st, 2008 by Lou Muddaris
Closing Data
| current | change | % | |
|---|---|---|---|
| Dow Jones | 7552.29 | -444.99 | -5.6% |
| NASDAQ | 1316.12 | -70.3 | -5.1% |
| S P 500 | 752.44 | -54.14 | -6.7% |
| FTSE 100 | 3874.99 | -130.69 | -3.3% |
| Nikkei 225 | 7703.04 | -570.18 | -6.9% |
| SPI Futures | 3270 | -128 | -3.8% |
| All Ords | 3,333.00 | -150.6 | -4.3% |
| Oil | 48.86 | -4.78 | -8.9% |
| Gold | 748.7 | 12.7 | 1.7% |
| Silver | 9.025 | -0.285 | -3.1% |
| Aluminium | 1751.5 | -74 | -4.1% |
| Copper | 3430.5 | -134.5 | -3.8% |
| Lead | 1171 | -69 | -5.6% |
| Nickel | 9655 | -550 | -5.4% |
| Tin | 11500 | -755 | -6.2% |
| Zinc | 1131 | -32.5 | -2.8% |
I'm just trying to establish what is the most devastating event; Is it the worst storms ever recorded in Queensland? The collapse of the stock markets? Or the collapse of the Australian cricket team? I know two of them will one day reverse and probably at about the same time…sometime next year.
About last night
I'll say this quickly.
1/The S+P 500 closed at 755 breaking through the old lows of the last bear market at 776.The Dow Jones fell 400 points
2/Congress will reconvene on December 2nd to vote on a bail out of General motors and Ford. The market was up over 100 on a supposed approval then collapsed on this delay, the markets loath uncertainty.
3/The Fed's Philadelphia manufacturing index fell by 39.3% making it the worst since records began. The market pays close attention to this forward looking indicator as it measures building permits, consumer expectations, factory orders, money supply et al. Most importantly it is researched by the Fed itself and not an economist's in house research. The Leading Economic Indicators fell by 0.8% and weekly unemployment claims rose 542,000 to reach a 26 year high.
4/Goldman Sachs and JP Morgan are axing 10% of their work force along with all the other investment banks. Incidentally GS share price closed under the initial public offering price of $53, in effect wiping out 10 years of gains.
5/Brokers saw forced selling. It doesn't matter on your view when people have to sell then it's a dominoe effect. My advice on this is if you're uncomfortable and even your quality of life is suffering then it's a no brainer. Alternatively if you can hang on and adopt a more stoic approach then don't sell. Hang on in there!
Markets always rise too far and fall too far. The Australian share market has certainly reached oversold territory. With a long term view you can be sure that you are buying value at these levels.
Babcok and Brown
Yesterday the shares were put in a trading halt at 25 cents. One of the 25 banks supporting them froze its loan of $150mln (HypoVereinsbank) in effect pushing them into bankruptcy. Our banks, CBA, ANZ, WESTPAC and NAB have lent more than $700 mln to them. The only solution is for the 25 syndicated banks to buy out the German banks exposure. Analysts say CBA in particular could have the biggest exposure. The banks have made no comment.
1/Gerry Harvey of Harvey Norman said "Short selling should be banned. Full stop. Not wrong there Gerry.
2/ They say Copper has a PhD in predicting future share price movements…Copper has halved in value. When it bounces and holds then we will rally.
3/The Dow Jones has fallen 47% from its highs. Watch for another 3% to hit the critical 50% retracement.
4/ The 3 month U.S treasury bill hit zero %! They will soon be paying you to borrow!
5/On a lighter note, Ansell is the only share to be going up…they make durex.
Advice
Spend today watching the cricket and turn off the media and your computer.
Quote of the day: "If you love your job you haven't worked a day in your life
Contact your Freeman Fox Stockbroker on 07 3031 9960 or 1800 003 369 Ext 7.
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