Brekky Edition 6/12

[300]

http://www.radioaukiman.com/images/misc/300finance .jpg

The Dow Jones finished over 190 points higher over night after good economic data was released suggesting that the US economy is stronger than investor sentiment currently suggests. There were stronger hiring figures in the private sector which suggests that the economy is starting to move forward rather than down the drain pipe. Stronger hiring meaning job growth might be a result of the lower US dollar making their exports more attractive. As a word of warning, the job figures in September returned back rather low (negative 4000 from memory) and were revised mid October to be substantially higher (positive 110,000). With such rubbery figures it makes these hard to believe that the positive territory will last.

In the ASX yesterday finished slightly lower by just over 10 points after a mid day low of over 40 points. Again, not massive swings, however with a strong lead from the US overnight it could be a good day; and upon saying that last time the US had a strong lead, the ASX went South. Maybe the mug Aussie punter realises that pain from the US is on ongoing fact of life these days?
Just my two cents

[300]

Interesting times in the US currently. There appears to be an unprecedented move being formulated by the Bush Administration (obviously the man himself couldn't come up with this on his own - gobble gobble) to head off the sub-prime crisis by freezing rates. The official word will come out tonight and could install investor confidence in a big way in the short term. I say could because the investor mob is a funny bunch and they may view the government intervention as a sign that there is some serious issues with the economy that the latest figures aren't reflecting. I will hopefully have more meat for the sandwich tomorrow morning.

If there is good news and the arrangement passes all hurdles, this should boost confidence. From all accounts it is the confidence that has been shot in the US credit sector but manifested in the housing market. To give a clearer idea of where I am heading, the total amount lent by banks is currently less than the total value of assets owned by the banks. Investors got wind of this and everything got super nervous. It might be a good Xmas for investors