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A stock market correction, some panic and nervous investors.

February 5th, 2010 · Greg Atkinson · 32 Comments

Over the last week the Australian stock market has taken a turn downwards pretty much inline with markets across Asia, Europe and the U.S.  Once again no mater how much the RBA talks up our economy, the fact is that Australia’s economic health depends on how our major trading partners are doing and investors are starting to get worried about the global economic outlook.

Over the last few days I have noticed that many financial journalists and market commentators have suddenly begun shifting their positions from being bullish on the Australian economy to now telling us to be cautious. 

I also believe it is time to be somewhat cautious, but I have been saying this for months as I wrote back in December 2009 in this article: The Australian stock market indicates all is not well.

A stock market correction was bound to come along, it was just a matter of time. (it always is) On the other hand I am pretty sure we will also see a rally follow in the weeks ahead and probably another correction or two this year. Stock markets are funny that way.

At present investors are being swamped by bad news ranging from concerns about European debt levels to geopolitical tensions between China and the United States. (that pesky Dalai Lama is causing trouble again!)

In Japan the Toyota brake problem has come not long after Japan Airlines (JAL) sought bankruptcy protection and then yesterday, a Sumo grand champion suddenly resigned after a drunken bar fight! Can anything else go wrong?

Well yes it can… we also have Bank of America executives being arrested, turmoil in Greece, trouble once again in Iraq, a very unstable situation in Afghanistan and President Obama strangely deciding that now is a good time to start picking a fight with bankers again.

Back in Australia we have seen some weakness in the retail sales figures, the situation regarding the Emissions Trading Scheme is as clear as clean coal and our friends over in New Zealand are dealing with unemployment at a 10 year high.

It is almost like there is a co-ordinated global effort underway to make any global economic recovery as difficult as possible!

Today as I write the Australian stock market is taking another beating but is is hardly anything to worry about at this stage in my view. (unless you have a margin loan of course)

The ASX All Ordinaries & ASX 200 are still a long way below the highs of 2007, so I hardly think they are anywhere near ridiculously overvalued. There may not be a lot of good value out there, but I don’t think you could say our stock market was in a bubble anymore…or could you?

I do worry a little however about the Australian domestic economy though and am concerned about the actions of the Reserve Bank. (as usual) At times the RBA’s appears bullish about the Australian economy, while at the same time sounding cautious.

For example the RBA’s Statement on Monetary Policy dated the 4 February 2010 contains this curious passage:

“Business investment in Australia, particularly in the resources sector, is at a very high level, although many businesses remain cautious about increasing their capital spending despite confidence having improved significantly. One area of particular weakness is non-residential building, with private-sector building approvals remaining at quite low levels. An important offset to the weakness has been a large increase in public-sector infrastructure spending, especially in the education sector”

So in plain English, business investment in Australia is being supported by the resources sector and government spending. Since government spending is being funded by racking up debt, what is really happening is that we are counting on the investment in the resources sector paying off, and in a big way because we need to take the profits here to help pay for school halls we didn’t need or those imported pink batts.

On one hand the RBA appears bullish regarding business investment, while on the other appearing somewhat cautious about business investment outside the resources & government sectors.

The entire statement from the RBA is full of these types of comments & observations. For example the statement also says that:

“Although the outlook for the world economy as a whole has improved, significant uncertainties remain”

but then later it says:

“In Asia, the issues are somewhat different. The Chinese economy has expanded very strongly and a number of other countries have been favourably affected as a result.”

So in this example they move from being bearish regarding the global economy to being positively upbeat about China and “somewhat” upbeat about Asia.

The overall statement from the RBA is not particularly helpful in the current environment because it pretty much confirms what I have been saying for a long time – that our economic managers are relying on China to keep our economy growing.

The RBA appears to be solely focused on China and fighting inflation. The United States and Japan, the world’s two biggest economies did not even rate a mention in the entire statement! (let alone anywhere in Europe)

It seems the RBA has grouped the global economy into three main regions: Australia, China & the rest. (Asia does get a mention, but that is only because they know it is near China)

Just to add to the confusion the RBA did not raise interest rates in February, so how confident can they be about economic growth in Australia? This action suggests to me that they are not quite sure what to do and the currency markets appear to have picked up on this with the Australian dollar dropping against the USD and the JPY for example, although of course the fall in commodities prices does not help our dollar much either.

Taking all of the above into account it is probably no surprise that Australian investors are a touch nervous and some panic has crept back into the markets. The only way stocks are going to get up near 5000 again is with the help of some good news and at present, it is difficult to think from where this may come from.

However I do feel that some stocks are getting close to being a touch oversold. I particularly like stocks in the energy and agricultural/food production sectors and I feel that these will do well in the years ahead despite the occasional pullback like we have seen over the last few days.

I also remain a believer that over the long term oil prices will climb well over $100 USD a barrel so with oil prices down near $70 now, it seems to be a good time to have a look at some listed stocks in that area as well.

I must stress at this point that my market timing skills are pretty poor and this is the reason I take a long term approach to investing in shares. For example I don’t normally expect to see a capital return on the stocks I invest in for at least 2-3 years, so this means that if I were to but stocks today I would be willing to hold them until around 2012 before thinking of taking any profits.

Finally on a positive note my old friend the Baltic Dry Index (BDI) does appear to be looking for a bottom after plunging below 3000. It is far too early to say that it might be about to rise again, but at least it looks like it might be stabilizing a little. With a little luck and a gag order on the G-20 leaders, we might just see it creep up again and take the stock markets with it!


32 responses so far ↓

  • 1 Anon // Feb 6, 2010 at 4:46 am

    “There will be lingering headwinds to growth from the financial meltdown, such as ongoing credit restraint and an upward drift in the personal savings rate. The U.S. economic recovery should be sustained, but it will fall far short of what would normally occur in the wake of a very deep recession,” said BCA Research.

    http://www.investmentpostcards.com/2010/02/03/picture-du-jour-gdp-%e2%80%93-what-it-really-looks-like/

    Lots of cyclicals are priced in for much better business conditions and profitability going forwards. Alot of small business eps/profitability/revenues/margins look flat to slightly better. Retail investors seem to think these businesses can avoid a near depression then go back to average profitability in the near term. Not going to happen this year I suspect.

    Looks like the market is now starting to get cheap. I predicted 9000-9800 DJIA targets a few days ago. Looks like we’re getting there. I deployed half my spare cash into large investment caps and then i’ll bottom fish for the last half as i still think there is further downside.

    Remember above is not advice, only commentary – seek financial advice and bankruptcy from your local financial advisor

  • 2 Greg Atkinson // Feb 6, 2010 at 9:39 am

    Anon I am starting to think we are seeing a fairly typical bear – bull market run albeit a very severe one.

    First we had the fall in world markets in early 2008 which took us into a bear market. Then we had a slight recovery (our suckers rally) before Lehman Brother’s came along and in September 2008 the markets went off a cliff and kept falling until March 2009…our second bottom if you like. (probably a joke in there somewhere)

    Next we had a sustained rally in 2009 as investors piled back into stocks sensing the worst was over and now, we are seeing a correction take some heat out of the market.

    Dare I say it, but this might be all pretty healthy and perhaps this latest correction is setting up the base for the next sustained rally?

    The world economy is not strong that is for sure, but it is certainly in better shape than it was back in the dark days of 2008-2009, so is there any reason why we should fear testing the lows of 2009 again?

  • 3 Anon // Feb 6, 2010 at 10:00 am

    “The world economy is not strong that is for sure, but it is certainly in better shape than it was back in the dark days of 2008-2009, so is there any reason why we should fear testing the lows of 2009 again?”

    lol the bunker and canned soup brigade preaching lower lows than 2009. I must admit when everything is in disarray its very difficult to not march with them!
    But I agree with your thesis. The markets cant be priced for Armageddon scenarios when we are nowhere near the 2008 implosion in economic data/sentiment etc.
    The only thing I can think of causing a crash like that is if Rudd announced Mr Swan to become prime minister and his first act was to cut stimulus to pay for hospitals and unemployed.

    What is worrying to me is that the other day I was talking to just the average joe and they were going on about how we’re all fine and the economy is “back to normal.”

    I’d say we will get through this but it will be alot harder and slower than most people suspect. I thought we would have a much faster recovery…but the economic figures and quarterlies i’m reading dont fill me with any confidence. Buffet and Gates mentioned a 3-4 year time line to reach normalcy.

    “Dare I say it, but this might be all pretty healthy and perhaps this latest correction is setting up the base for the next sustained rally?”

    Yep, its bringing in a discount to allow for an imperfect recovery. Cant be bad for longterm appreciation.
    Since 1871 the SnP 500 has only dropped very few times in the second year after a significant down/crash year. So statistically the odds are for an overall higher year but the volatility is going to take alot of participants out.

    Remember above is not advice, only commentary – seek financial advice and bankruptcy from your local financial advisor

  • 4 Greg Atkinson // Feb 6, 2010 at 11:55 am

    Anon I guess at this stage I will stick to what my outlook was back in August last year when I wrote this post: http://www.shareswatch.com.au/blog/stockmarket/a-global-economic-recovery-does-not-mean-business-as-usual/

    What I feel has happened is some investors have been carried away by the global recovery, rushed back into stocks and then have been spooked by some bad news and done some panicked selling.

    If my view is correct, then we are probably getting near one of those times when there are bargains to be found…if you take a long term view.

    I know the doom crowd reckon a new low will be reached this year but they also predicted a housing crash in Australia in 2009, a global depression and the end of paper money so I think I might give their predictions a miss. About the only thing they are holding onto now is a belief that gold will surge onwards and upwards.

  • 5 Anon // Feb 6, 2010 at 12:22 pm

    Which sectors are catching your eye Greg?

    Atm im bullish US Financials, Healthcare, Consumer staples and Environmentals. Atm 50% of my equities portfolio is Healthcare and US Financials – adj from 80% cyclicals last year.
    I was bullish Japanese REITS but my biggest investment got taken over (CKT). Bloody packers company took us out – he obviously suspects the Japanese property market is close to turning.

    Bearish Cyclicals, Commodities and
    Australian real estate – especially in areas with Biker Pete ownership 😉

    Remember above is not advice, only commentary – seek advice/info from your local financial advisor

  • 6 Greg Atkinson // Feb 6, 2010 at 4:40 pm

    Anon I also took some damage in terms of J-REIT’s. I thought it would be pretty hard to get burnt borrowing for property in Japan at Japanese interest rates but some gung-ho western managed J-REIT’s were able show once again how so-called financial wizards can turn money into dust in the blink of an eye 🙂

    I am not quite into U.S stocks yet, but I reckon the sectors you mention would be pretty tempting at the moment especially health-care.

    Right now I am looking at companies with good exposure to oil as I find it hard to believe that oil will still be at around $70 USD a barrel in 2011/2012. I also like diversified mining companies especially if they have some uranium & rare metal assets. Short term I am a touch bearish on the whole commodities story but long term I reckon it will do okay, albeit a touch down perhaps from the boom days of 2007-2008.

  • 7 Ned S // Feb 6, 2010 at 5:45 pm

    I would be interesting to have some idea how far through the global deleveraging process we are. (I saw the figure of 50% bounced around a few months ago if I recall correctly.)

    But that aside, we can be pretty sure (to my way of thinking) that we aren’t going to see the global financial system allowed to collapse catastrophically – Which was the concern when the ASX was 3100 odd and the SP500 was 666 and there were calls for 400. So I’d figure it would be hard to see a retest of those levels anytime soon.

    The other general thing of interest (to me), is that even the most positive thinking, yet still sensible freebie American stock market commentator I follow, is certainly allowing for the possibility the American consumer may “never” fully come back. And talking in terms of consider buying stocks for 10 years down the track – In Brazil and India. He prefers them to China.

    The OECD reckons China is good for growth of 10.2% in 2010 and 9.3% in 2011. But from what I can read, it seems a bit unrealistic to hope China can “save the world”. I guess the hope is that they just might save Oz for a few more years while all the nasty deleveraging continues to play out?

    A final comment: I can’t find it in my heart to think Oz is going to see deflation long term.

  • 8 Ned S // Feb 6, 2010 at 7:46 pm

    “Bearish … Australian real estate – especially in areas with Biker Pete ownership.”

    Play nice Anon – I’d hate to ever get any reason to suspect your dear ole ma is a 10 quid pom and your daddy is a freebie dutch boy?

  • 9 Greg Atkinson // Feb 6, 2010 at 10:24 pm

    Ned I think Anon was making the comment about Biker Pete very much tongue in cheek. Personally I would like to follow BP around and buy a few places in the same areas he does 🙂

  • 10 Ned S // Feb 6, 2010 at 11:15 pm

    If you can tell me Anon’s email address doesn’t originate in Europe Greg, and even better, does originate in Oz, then my prozac filter might wind back half a notch.

    Barring that, I’d be extremely stupid to not remain in hanging judge mode – With all and any suspects being potential tree ornaments. NO Smiley Face!

    As prozac is one extraordinarily ILL little piece of doggie do! 🙂

  • 11 Greg Atkinson // Feb 6, 2010 at 11:30 pm

    Okay I hear you now Ned 🙂 I think we are safe..maybe. I do hope we can avoid some of the trouble that pops up elsewhere.

  • 12 Ned S // Feb 6, 2010 at 11:49 pm

    Cheers mate!

  • 13 Anon // Feb 7, 2010 at 5:37 am

    Hey Ned, Greg was right…it was just an ill timed joke. Probably not appropriate given the amounts of money speculated in real estate.
    Appologies.

    BTW what is a prozac filter? and in europe? I’m abit lost on that one.

  • 14 Anon // Feb 7, 2010 at 7:27 am

    “I am not quite into U.S stocks yet, but I reckon the sectors you mention would be pretty tempting at the moment especially health-care.”

    Over the last 10 years, its remarkable how poor shareholder returns have been in Health. Constant eps/profit growth for numerous companies and sideways moving charts due to inflated expectations at the origination (analogous to Walmart).
    The lost decade for healthcare…considering demographics and how much future monies government will allocate, one could reasonably conclude more auspicious returns.

    Greg have you thought of or have entered the environment sector ?
    Seems to be lots of future growth but with concomitant lack of selection and earnings history.

    Remember above is not advice, only commentary – seek advice/info from a competent financial advisor

  • 15 Anon // Feb 7, 2010 at 8:04 am

    “The other general thing of interest (to me), is that even the most positive thinking, yet still sensible freebie American stock market commentator I follow, is certainly allowing for the possibility the American consumer may “never” fully come back. And talking in terms of consider buying stocks for 10 years down the track – In Brazil and India. He prefers them to China.”

    Yes, when I was looking at American retail stock I priced in a recovery in spending but obviously not back to previous levels. Unfortunately I didn’t think the recovery was going to be as slow and as weak as what is occurring now (should have heeded Greg’s commentary). Clearly the American consumer is more frugal. Many are deleveraging and/or unwilling to take on further consumer/credit-card debt.
    I think if you bght stocks and held them for 10 years that is a good plan in theory. The problem would be handling the 50-70% swings throughout, plus the dogs that never recover. Also one has to wonder how emerging economy future returns may pan out when everyone is on one side of the ship spruking “China and India will save us.”

    People were envisioning similar prospects about dot coms prior to their collapse. Then about health in the early 2000’s then with commodities in 08 with inflation and dont forget the peak oil doomers when oil was $140 a barrel.
    Now we have the end of fiat money doomers hence my big investments in the British pound in USD last year. I remember everyone buying gold running into their bomb shelters and getting rid of cash as fast as they could 😉
    I actually bght some Euros last session as i’m planning to buy some European investments if this PIGS situation causes more panic.

    To be honest I think the person who gets it right alot is Greg. He should be on CNBC instead of alot of the idiots on there. If I have that channel on I usually turn the sound off lol. Greg have you thought about writing a newsletter, I think you’d make a mint 😉

    Remember above is not advice, only commentary – seek advice/info from a competent financial advisor

  • 16 Greg Atkinson // Feb 7, 2010 at 11:13 am

    Here is a good example of a market commentator in the mainstream media jumping on the “correction? bandwagon: http://www.smh.com.au/business/its-governments-turn-to-pay-so-we-all-must-pay-20100205-nikt.html

    According to the “wise” Malcolm Maiden the current correction is one “we had to have”. Thanks Mal, I guess the next rally will be the rally “we had to have” hey?

    He then goes on to make this bizarre statement:

    “Last year’s rally assumed that the climb away from the crisis would be smooth”

    How did he come to that conclusion I wonder? Actually I would say last years rally was a fairly classic bounce off a very low level and I don’t think there were many (any?) people expecting the global economy was going recover smoothly…apart from Malcolm perhaps!

  • 17 Ned S // Feb 7, 2010 at 7:02 pm

    Saying I’m confused like everyone else doesn’t sell a lot of newspapers hey? 🙂

    I guess for those who follow stocks, it’s a question of why you are buying (or shorting?) – Do you figure you can beat Goldman Sachs on this short term trade? Or are you saying it seems like it could be good value given time.

    And I’m sure I don’t have the savvy to be making calls like those.

    I guess, that deep down, I’m taking the view that deleveraging will eventually end and the world will head off on its usual and preferred inflationary way again is about all.

  • 18 Greg Atkinson // Feb 8, 2010 at 10:05 am

    Ned I gave up a long time ago trying to “beat” the market or thinking I was clever enough to make money from short term trends. I now sit back and just accept the stock market will move in cycles and that after each bubble there is pain, chaos and predictions of doom before people get busy setting up the next bubble.

    Right now I simply expect that it will take years for the global economy to settle down again and some national economies will be struggling for perhaps a decade or more. But it has all happened before..many times.

    As for buying stocks, my approach at the moment is to look at a company and ask: will this company’s share price be significantly higher in 2-3 years time? If I convince myself that there is a good chance it will be, then I might think about buying a very small parcel of stocks.

  • 19 Greg Atkinson // Feb 9, 2010 at 9:43 am

    Anon – firstly sorry for the delay before your comments showed up. If you change any details (e-mail address etc) then the moderation system thinks you are a new person and your comment has to be manually approved. Since I do actually have a day job, this means it can take me a while to get in and hit the “okay” button.

    Now onto stocks. I am already an investor in the “green” energy sector and have been sadly disappointed so far. The companies generally seem to have lots of potential but are not exactly cash-cows at the moment. I would say I have made almost nothing from investing in this sector so far, I would have done better sticking with fossil fuel related companies!

    As for spotting trends, well I do sometimes get it right but sadly I seem to have the ability to pick the wrong stock in the right sector. For example I guessed financial stocks would bounce back but decided to try and ride Babcock & Brown (BNB) up…argghh! What a blunder!

    I also managed to invest in a gold mining company during the years when gold was rising but believe it or not, that company basically went under!

    My biggest mistake over the last few years is that I paid too much attention to analysts recommendations. In 2008 I went into quite a few stocks that many brokers/analysts were keen on only to find them crash just months later.

    Now I hardly look at any research and simply look at each company not as investment but as a business starting off with: do I like what the company does.

    I have always tried to be a long term value type investor, but I have found that even this approach has limitations. Still, when all is said and done there is an awful lot of luck involved in being a good investor.

    As for writing a newsletter, I don’t really have the time and I besides I prefer the freedom of being able to rant about anything via this blog. Nobody can edit me here 🙂

  • 20 Anon // Feb 9, 2010 at 10:23 am

    “I have always tried to be a long term value type investor, but I have found that even this approach has limitations. Still, when all is said and done there is an awful lot of luck involved in being a good investor.”

    Yeah theres alot of competition in value investing now. But I agree it has limitations. I used to rely heavily on bookvalues until I realised alot of them were fictional 😉

    One value stock that lots are touting atm is Kraft. Heres a presentation on its value:

    http://www.tilsonfunds.com/Kraft.pdf

    I am not sure thats enough return for me, I would prefer low 20’s ;). I have enough stalwarts already. Probably be regretting that statement 3-4 years from now hah.

    Regarding luck, you definitely need loads of it. But I think intuition plays a big part. Theres been so many times where the numbers looked excellent but my gut was saying something is not right here…i’d dump and companies would collapse several months later. I guess you cant learn that in a finance book, theres alot of art to the markets.

    I noticed you had an investment in solar sails, from perusing earlier. Interesting concept. Are they thinking of camouflaging it abit…the visual affect would be important to the higher end market ?

    “As for spotting trends, well I do sometimes get it right but sadly I seem to have the ability to pick the wrong stock in the right sector. For example I guessed financial stocks would bounce back but decided to try and ride Babcock & Brown (BNB) up…argghh! What a blunder!”

    I’ve done that aswell. I picked some commodities early price appreication potential. Bght equities I thought were positively correlated. The commodity went up and the stock went backwards lol. I think Sector ETFs are the best if your trying to bet sectors. Pick the stock and the sector etf for insurance.

    Remember above is not advice, only commentary – seek advice/info from a competent financial advisor

  • 21 Greg Atkinson // Feb 9, 2010 at 9:10 pm

    Anon thanks for the link. I can see sense in going into something like Kraft but I am not sure the risk/return balance is quit right as I think you were suggesting.

    As for the “Solar Sails” that little adventure is via a small company I work at. My way of thinking is technology will help us kick our oil and fossil fuel habit, not a a tax by stealth like the ETS. The designs of the sails are getting “sexier” as the technology improves.

    Since I have an engineering background I tend to drift towards tech related stocks, not that this has done me much good so far 🙁

  • 22 Ned S // Feb 12, 2010 at 11:24 pm

    My big fat Greek bailout – European unity in action – The Germans don’t want to bail out the Greeks; The Greeks reckon their bailout isn’t big enough; The French reckon it’s those despicable Anglo-Saxon banks that caused it all; And Gordon Brown reckons “What Euro? – We don’t use the bloody Euro!” 🙂

  • 23 Anon // Feb 12, 2010 at 11:36 pm

    “Yes, when I was looking at American retail stock I priced in a recovery in spending but obviously not back to previous levels. Unfortunately I didn’t think the recovery was going to be as slow and as weak as what is occurring now”

    Well I was right the first time, US retail sales up and appear to be recovering somewhat.
    http://www.bloomberg.com/apps/news?pid=20601087&sid=aLlZ432DjWkw&pos=3

    Lucky i doubled my Walmart holdings 😉 Unlucky I sold my weaker retail stocks to fund the purchase !

    “My big fat Greek bailout – European unity in action – The Germans don’t want to bail out the Greeks; The Greeks reckon their bailout isn’t big enough; The French reckon it’s those despicable Anglo-Saxon banks that caused it all; And Gordon Brown reckons “What Euro? – We don’t use the bloody Euro!” :)”

    Its like days of our lives. They will have to do a mass bailout theres no other choice. The funny thing about all this is post bailouts people will realise the Pound, the yen and the USD are just as bad if not worse.
    Bloomberg is moving on from the PIIGS and targeting China now it seems. Gotta keep viewers on the site 😉

    Beijing Seen Vacant for 50% of Commercial Space as Chanos Predicts a Crash:
    http://www.bloomberg.com/apps/news?pid=20601109&sid=a6i2PSZD.Jr4&pos=13

    Remember above and all posts not advice, just commentary, seek a professional adviser for info/advice/decisions.

  • 24 Greg Atkinson // Feb 13, 2010 at 7:33 am

    What has been a bit of a surprise for me is the duration of what I call the Economic Twilight Zone (see: http://www.shareswatch.com.au/blog/stockmarket/the-economic-twilight-zone/) although in hindsight I now realize that since we had such a big bubble, I should have expected the uncertainty in the world’s financial markets to drag on for maybe a year or more.

    There is good economic news out there but also plenty of worrying signs and trends. The BDI for example is looking weak and as Anon points out the real estate market in China is a bit of a worry, although some China experts say that the oversupply in office space in the big cities in China is just a short term blip. Who to believe?

  • 25 Ned S // Feb 13, 2010 at 7:12 pm

    Still happy to hedge bets here – Investments = 60% mortgage free Oz residential property + 40% AUD Pacific Pesos.

    “They will have to do a mass bailout theres no other choice.” – If I was Angela Merkel, the thought might be flicking through my mind that given I have East Germany safely back in the fold now, is starting to print up some “Deutsche Euros” an option? 🙂

  • 26 Ned S // Feb 13, 2010 at 7:36 pm

    If I was real keen to hedge away from Oz (and I’m not because Asia still seems as good [better even?] than most) then putting a few AUD into CAD could suggest itself as an option.

  • 27 Ned S // Feb 26, 2010 at 12:57 pm

    I see there are a few hairline cracks appearing in the Euro Union – The Greeks reckon the “Nazis” never gave their gold back forsooth! 🙂

    Ah those feisty Mediterranean temperaments – Do we detect a slight disinclination to do the stiff upper lip, shoulder to the wheel and let’s soldier on old chap routine?

  • 28 Ned S // Feb 26, 2010 at 1:16 pm

    Plus they reckon the bloody Eyeties cheated their way into the Union too!!! 🙂

    Hmmm … There goes the Greek Mafia’s claim on Omerta. Seems they aren’t even big on the “honour amongst thieves” thing?

    Mental note: Think long and hard before accepting marriage proposals from nice Greek girls. Or business propositions from their daddies!

  • 29 Greg Atkinson // Feb 26, 2010 at 2:14 pm

    Yes I heard about the claim regarding the gold, they certainly know how to have disputes in Europe!

    Well I did say last year to watch Europe in: The forgotten economic giant: The European Union and actually someone back then left a very good comment about debt in the EU.

    Still Europe is a very big economy and I doubt Greece will drag the whole house down. I am probably wrong, but I reckon this is a bit of a storm in a teacup as they say.

  • 30 Ned S // Mar 2, 2010 at 2:18 pm

    My guess would have to be that the RBA is looking to China because it is a developing nation with a nice big surplus to spend on its future development. It’s simply where they see the most potential for growth that will benefit Oz perhaps?

    Correct me if I wrong, but I have a vague recollection you opined a good while back that the GFC would see winners and losers Greg? With your thoughts being that Asia was likely to be in the winners camp.

    Seems to me that is what is happening. With Oz going along for the ride.

  • 31 Greg Atkinson // Mar 3, 2010 at 10:56 am

    Ned yes I said a while back that Asia would come out of the GFC a winner and the U.S would be left in a weaker position. But I don’t think Oz will be a winner either, we now import much more than we export and are racking up a lot of private & public debt.

    We may just be getting ourselves use to a lifestyle we can’t afford!

  • 32 Ned S // Apr 20, 2010 at 10:48 am

    I’d have thought the markets would be a bit more worried about comments like “The Fed is finished with its job of providing liquidity to markets during the financial crisis and is debating how best to withdraw reserves from the financial system” than they seem to be? :

    http://www.reuters.com/article/idUSTRE63D4NC20100415

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