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MARKETS
Some fantastic insight from Greg Canavan via +Daily Reckoning Australia
By +Greg Canavan •
April 11th, 2013
It took a while, but overnight the S&P500 just broke out
to new, all-time high. That’s confirmation of the bull market, right? Maybe it
is...but you might want to check
this out before diving in.
What took the
market higher?
What, do you really need a reason?
Well, if you must. There’s always a reason. But a word of
warning first...none of the ‘reasons’ really mean anything. In fact, the whole
idea of the market being a ‘market’ in the true sense is a fraud. The place is
a wild, debauched casino run by the house, for the house.
It reminds us of a show we watched last night. It’s the one
where British actor Ross Kemp goes to some of the world’s most dangerous
places. Aptly, it’s called Extreme World.
Last night he was in the French Mediterranean port city of
Marseilles, going into housing estates with poor immigrant populations. These
estates are conduits for massive illicit drug flows. Millions of euro’s pass
through them daily, yet the inhabitants are still poor.
That’s because most of the profits go to the rich and well
protected — the Corsican drug families, as it turns out — who take little to no
risk. The scraps go to the poor inhabitants, who take all the risk.
A bit like the stock market, really. The big banks
and the individuals that run these organisations take absolutely no risk in
terms of their personal position. They take MASSIVE risks with other people’s
money, but there is no flow on effect, no ramifications for their reckless
behaviour. They are a protected species...the beneficiaries of a ‘heads I win,
tails you lose’ system.
You, on the other hand, are the drug runner. You’re taking a
big risk in an attempt to scrape together a few extra percent here and there.
If you get it wrong, you won’t receive a bailout. Or worse, if someone else
gets it wrong, you may receive the pleasure of a ‘bail-in’, as happened recently to ‘savers’ in
Cyprus. Drug barons are merciless...so are bankers.
But the big daddy in all this, the ‘patron’, is the Federal Reserve. It procures
the drugs (from nowhere) and hands them on down the line. It’s a dirty and
corrupt system, and overnight we received further confirmation of this grimy
little sham we call the market. From the Financial Times:
‘The Federal Reserve leaked the minutes of its last rate-setting meeting to bank lobbyists as well as congressional aides and trade associations.
‘On Wednesday the Fed published
its March minutes in the morning rather than the afternoon as had been
scheduled. The central bank said it was doing so because they had already been
accidentally released on Tuesday afternoon to a distribution list, comprising
“mostly congressional staffers and trade association members in Washington”.
‘However, on Wednesday afternoon,
the Fed published that list, which included lobbyists at Goldman Sachs,
JPMorgan Chase and Citigroup, among other banks.
‘Though the list was
predominantly comprised of staffers to members of Congress, it also included a
significant number of employees working for banks, opening the possibility that
they could have passed on the information to traders.’
We’re not going to make a big deal out of this. It’s hardly
surprising. Rather than feel outrage, take it for what it is: confirmation that
the financial system where you deposit your savings and accumulated wealth is
in the late stages of degeneration and decline.
To keep you in servitude, the pushers see to it that the big
indexes move to new highs. First the Dow Jones...then the S&P500. Meanwhile, your salvation,
your detox and your ticket to financial freedom, gold, falls in PRICE (not value) to discourage
you from breaking free, from getting your assets and wealth out of the system.
For history buffs, if you ever wanted to know what the
decline of the Roman Empire looked like, you have a front row seat...
But we digress...we were looking for ‘reasons’ why the
market rallied to a new high last night. Apparently, it had something to do
with Bank of Japan (BoJ) governor Kuroda telling everyone what they already
knew, that Japan will go ahead with its stimulus. It also had to do with
China’s March trade figures, which the market liked (or just ignored) even
though export growth missed forecasts and the data itself was
widely laughed at.
China watchers were critical of the trade data. Exports to
the US and Europe both fell year-on-year while exports to Hong Kong jumped
errr....92%, bumping up overall export growth to a respectable 10%. Imports,
apparently, rose 14%. The use of trade invoices to hide inflows of capital and
fake export orders to gain government rebates were cited as reasons for the
wild data spray.
Does anyone believe what China says about its economy anymore?
More degeneration.
But don’t let dubious data get in the way of a rushing herd
of bulls. Or stories about China’s first credit rating downgrade in 14 years.
Journalists have to come up with something to explain the unexplainable. But
the easiest explanation is that global central banks have provided party-goers
with so many drugs that the party is getting out of control.
The punchbowl analogy no longer does it. And anyway, alcohol
is a depressant. The Federal
Reserve and its central banking pushers are administering stimulants
all around. They have all the class and moral authority of a drug baron,
rolling in riches while spreading addiction and misery to millions.
Misery, it seems, which is falling on those who conduct
trade in Australian dollars. The persistent
strength of the Aussie is killing manufacturing in Australia and even hurting
the companies that are supposed to be the reason behind the strong currency —
the miners.
US dollar commodity prices have been weak (underscoring the
point that central bank efforts are doing little to improve the ‘real’ economy)
and combined with a strong Australian dollar, the effect on Aussie miners has
been significant.
Both Rio and BHP have pulled back on their expansion
plans and are actively communicating to the market their strategies to cut
costs over the next few years. It’s a far cry from the pre-2008 crisis era.
Which is why we made the point yesterday that this current round of market
craziness is very different to the last era.
We don’t know when it will end. But we stand in awe of the
collective stupidity, ignorance or arrogance (we’re not sure which) of our
ruling classes and moneyed elites, who have managed to get us all back to a
much worse place than we were six years ago, all the while patting themselves
on the back for a job well done in fostering ‘recovery’.
Regards,
for The Daily Reckoning Australia
REAL ESTATE
Karratha leads growth
in nations mining towns
Karratha’s town population has grown faster than any other
Australian mining community, according to property analysts.
LJ Hooker Karratha Principal David Hipworth said statistics
showing the town’s population grew faster than any other Australian mining community
underlined the area’s investment potential.
Karratha’s population grew at a rate more than five times
above the national average between ...continue reading
Mining towns are hot property as. Fantastic growth potential and in some cases bottom of the market buying. Try to stay away from one industry towns if you are risk adverse, otherwise take advantage of some of the opportunities in towns such as Kalgoorlie-Boulder where you can get low cost properties with 8% gross yields...
Outstanding in their
yield
The focus back to the Australian office sector by the real
estate investment trusts, superannuation funds and sovereign funds is forcing
prices up beyond their values, according to investors.
While this trend will boost the bottom line, the market is
cautious about over-inflation.
The head of research and consulting, Australasia at Jones
Lang LaSalle, Dr David Rees, said at the group's investor conference in Sydney
on Wednesday that yield spreads to real bond rates were near record ...continue reading
Source: +The Sydney Morning Herald
As winter looms real
estate agent activity starts to ease: RP Data
The RP Data listings index has started to ease from its seasonal
peak over recent weeks.
The index peaked at 308.4 points over the week ending 24
March, which was its highest level since March 2011.
Since that time there has been a clear easing of the index. The recent strong ramp up in the ...continue reading
House-prices
expectations rise to near three-year high
Australians’ confidence in the outlook for home prices
climbed to the highest level in almost three years, a non-government survey
showed today, in the latest sign near-record-low interest rates are energising
the housing market.
The quarterly Westpac Bank-Melbourne Institute house-price
expectations index rose to +53.9 in April compared with ...continue reading
SME
Sydney Seed Fund to sink up to $100k into 20 start-ups
The co-director of the Founder
Institute in Sydney has partnered with two other serial entrepreneurs
to launch the Sydney Seed Fund, offering tech start-ups up to $100,000 each.
+Benjamin Chong, who heads up the Sydney branch of the +Founder Institute, is also a partner at investment firm Right Click Capital and
a director at global online travel agency +Jetabroad.
He has partnered with +Ari Klinger and Garry Visontay to
launch the Sydney Seed Fund, an early stage investment fund aimed at “Sydney’s
most passionate tech founders”.
The fund aims to invest between ...continue reading
Well done gentlemen! I wish you the best of luck with Sydney Seed Fund and look forward to see what fantastic companies will have their future secured thanks to your fund.
Source: Startup Smart
ANZ to explore
smaller business market
ANZ (ANZ.AX)
has announced that it will explore Australia’s smaller business market, having
pledged $1 billion for start-up loans for the next year to attract new
customers.
Whilst smaller businesses contribute roughly 20% of
Australia’s GDP, the perception has been that the big four banks have favoured
larger businesses and have ignored the needs of the smaller companies. The ANZ,
however, is currently approving more than ...continue reading
Why ‘middle
Australia’ is still prime selling territory for start-ups
Leading demographer Bernard Salt has warned start-ups not to
deviate from selling to ‘middle Australia’ after new Australian Bureau of
Statistics figures showed that the average Australian is a married, 37-year-old
woman.
New analysis by the ABS, using data from the 2011 census,
reveals the average Australian is married and lives in the suburbs.
“While we know that no single person is average in all
respects, the census shows that ...continue reading
NSW offers SME
research funding
The NSW government has opened up the coffers on its
innovation funding program for small business.
Launched last December, the Innovate NSW program is backed
by $6.7 million in funding over four years and is aimed at boosting research
collaboration between SMEs and the big end of town.
From today, Innovate NSW is looking for funding submissions from SMEs with a view to approving about 250 applications.
The program provides grants of up to ...continue reading
From today, Innovate NSW is looking for funding submissions from SMEs with a view to approving about 250 applications.
The program provides grants of up to ...continue reading
That's it for this weekend! Stay tuned for changes ahead and feel free to ask us questions with regards to material we have posted or queries you may have on your investment journey. If we can't answer your questions, we will find someone who can! Until the next time dear readers...
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