Interdum stultus opportuna loquitur...

Wednesday, August 31, 2005

OzRant: The Power Of Utter Crap...

Note - from June 24th 2009, this blog has migrated from Blogger to a self-hosted version. Click here to go straight there.

Hope springing eternal, or idiocy founded on the widespread belief that with (roughly) 40% of the 9% of wages raped through compulsory 'saving', equities have a 'built in' demand... in perpetuity?

Let's debunk the basis for the 'idiocy' side of things first.

See, there's a fairly robust logical 'lemma' from economics, which says that if you rape someone's paypacket and try and force them to save, they will simply reduce their voluntary savings. 

Politicians think people are idiots, which is not surprising, since most people that politicians meet- Party Faithful - are idiots. But although most people are pretty thick, they understand that having 9% of their gross ripped out of their paypackets - whether they like it or not - is a form of savings. And of course the propaganda machine cranked up to convince them of exactly that.

So. Thinking - thanks to Goebells' techniques and government advertising - that his forced 'contribution' to the financial services industry is supposed to rescue him from a retirement diet of dog food and tinned Steak & Kidney pie, Joe Schlub thinks "Fuck it - I'm going to buy a better car/house/wife", and he reduces his voluntary savings.

It's called intertemporal substitution; the overall extent of savings - voluntary plus involuntary - will depend on the individual's rate of time preference. And the government can do whatever they frigging well like to try and prevent it from happening, but it will happen anyhow... and most people will still end up eating Pal when they hit 70. 

Just have a look at those 'Industry Super' ads - and look at how piss-awful the retirement outcomes are for the individuals modelled in the ads: if the economic system then is the same as it is now, $250k in 35 years' time won't buy a decent ONE-year lifestyle, let alone fund a further 50 years. It's a fucking SCAM, folks.

So any time you hear someone blather about a guaranteed inflow of $40 bill a year into equities, hit them on the side of the head with something hard, and give them the link to this page.

Now back to the Hope side of things- not the real hope (like what I've got) that humanity transcends material scarcity within a generation... rather the false hope that equities will continue to arc upwards until everybody is rich and nobody relies on near-expiry tinned beans from NQR to survive.

The markets are overdone; period. The next five years are not going to be pretty - period. The amount of toxic debt being carried by households and businesses alike is going to devastate the global economic system. House prices are already starting to fall pretty hard in the UK -  just ask Phony B.Liar: his 'investment' in his £3.5 mill house is already underwater to the tune of £750k, and is going backwards by £15k a month. It's so bad that he has had to whore himself to Carlyle post-politics. Sucked in, you maggot.

Major Market Indices

Notice something? Despite the bounce in Crude, WPL didn't move. It tried to, but after the nuffie-spurt in the morning it was dragged down and down all day - defying the broader market. Not good... I promised to make public the link to that piece I did on WPL over the weekend, but that will have to wait.

Oh all right - it's just a bloody link, after all... here is it: Woodside Summary.

After an early downdraft, the ASX All Ordinaries (XAO) bounced during the afternoon, to eventually close 6.10 points (0.14%) above the waterline, finishing at 4413.50 points (also its high for the day). The day's low - 4386.5 - was set at almost precisely 1 p.m.; call me skeptical, but frankly when these afternoon, no-volume-worth-a-damn rallies happen, I get... skeptical.

Total volume traded on the ASX was a gluggy 840 million units, 15.1% below its 10-day average. Of the 489 stocks in the index, 190 rose while 163 fell (that's a bit better on the overall count side of things... not that it made a bean's worth of difference). Despite the winning headline, Volume was tilted in favour of the losers by a margin of 1.1:1, with 195.63million shares traded in losers while 181.72million shares traded in the day's gainers.

The Index that forms the cash basis for the SFE's Share Price Index Futures - the S&P/ASX 200 (XJO) - rose by 8.20 points (0.18%), finishing at 4446.80 points.

The "heavy hitters" of the Australian market - the ASX 20 Leaders (XTL) - rose by 4.90 points (0.21%), finishing at 2373.00 points. Within the index members, there were 9 that rose, and 10 losers. Total volume in rising issues within the ASX20 amounted to 27.51 while volume in the losers totalled 57.01m units.

The major winners in the "big guns" were -

  • Foster's Group (FGL), +$0.150 (2.69%) to $5.730 on volume of 6.88m shares;
  • St George Bank (SGB), +$0.370 (1.38%) to $27.100 on volume of 995,000 shares;
  • Westpac Banking Corporation (WBC), +$0.130 (0.66%) to $19.710 on volume of 4.54m shares;
  • Commonwealth Bank Of Australia (CBA), +$0.210 (0.57%) to $37.340 on volume of 2.87m shares; and
  • Alumina (AWC), +$0.030 (0.51%) to $5.950 on volume of 2.26m shares.

The following stocks made up the biggest percentage losers in the big-guns:

  • Amcor (AMC), -$0.14 (2.09%) to $6.56 on volume of 4.08m shares;
  • News Corporation (NWSLV), -$0.25 (1.15%) to $21.40 on volume of 1.27m shares; and
  • Wesfarmers (WES), -$0.43 (1.08%) to $39.36 on volume of 775,000 shares; and
  • AMP Limited (AMP), -$0.08 (1.07%) to $7.37 on volume of 5.38m shares; and
  • Rio Tinto (RIO), -$0.44 (0.87%) to $50.30 on volume of 1.75m shares.

At the smaller end of the market's capitalisation scale, the ASX Small Ordinaries Index (XSO) - the only place where underexploited value exists with any regularity - rose by 5.20 points (0.20%), finishing at 2558.10 points. The major winners in the "pop-guns" were -

  • Orbital Corporation (OEC), +$0.010 (9.09%) to $0.120 on volume of 2.57m shares;
  • Cabcharge Australia (CAB), +$0.340 (6.23%) to $5.800 on volume of 526,000 shares; and
  • Amalgamated Holdings (AHD), +$0.250 (5.88%) to $4.500 on volume of 502,000 shares; and
  • FKP Property Group (FKP), +$0.200 (5.14%) to $4.090 on volume of 1.7m shares; and
  • Psivida (PSD), +$0.035 (4.29%) to $0.850 on volume of 202,000 shares.

The losingest-little-guys for the session were (in order of decline):

  • Lynas Corporation (LYC), -$0.020 (10.53%) to $0.170 on volume of 586,000 shares;
  • Resolute Mining (RSG), -$0.090 (9.47%) to $0.860 on volume of 2.63m shares; and
  • Kresta Holdings (KRS), -$0.015 (6.25%) to $0.225 on volume of 499,000 shares; and
  • Tap Oil (TAP), -$0.160 (5.11%) to $2.970 on volume of 1.84m shares; and
  • Sino Gold (SGX), -$0.090 (4.7%) to $1.825 on volume of 95,000 shares.
Index Changes
XAOAll Ordinaries4413.56.10.14%526.64m
XTLS&P/ASX 2023734.90.21%98.38m
XFLS&P/ASX 504345.77.80.18%217.75m
XTOS&P/ASX 1003602.56.60.18%350.84m
XJOS&P/ASX 2004446.88.20.18%433.62m
XKOS&P/ASX 3004440.68.20.19%0
XMDS&P/ASX Mid-Cap 504446.590.2%0
XSOS&P/ASX Small Ordinaries2558.15.20.2%139.69m

All Ordinaries Market Internals

Market Breadth
Advancing Volume27.51m123.49m162.6m181.7248.63365.16
Declining Volume57.01m140.99m167.64m195.6345.46300.6

S&P/ASX200 GICS Sector Indices

The top sector for the day was XSJ Consumer Staples which gained 0.91% to 5833.60 points. The sector was helped by

  • Burns, Philp & Company (BPC), +$0.030 (3.3%) to $0.940 on volume of 6.26m shares;
  • Foster's Group (FGL), +$0.150 (2.69%) to $5.730 on volume of 6.88m shares;
  • Mcguigan Simeon Wines (MGW), +$0.100 (2.3%) to $4.450 on volume of 497,000 shares;
  • Lion Nathan (LNN), +$0.110 (1.38%) to $8.060 on volume of 542,000 shares; and
  • Coca-Cola Amatil (CCL), +$0.070 (0.82%) to $8.640 on volume of 1.8m shares.

Second in the sector leadership stakes was XPJ Property Trusts which gained 0.46% to 1848.60 points. The sector leaders were -

  • Ing Industrial Fund (IIF), +$0.020 (0.9%) to $2.240 on volume of 3.53m shares;
  • CFS Gandel Retail Trust (GAN), +$0.015 (0.86%) to $1.760 on volume of 2.56m shares;
  • Stockland (SGP), +$0.050 (0.85%) to $5.900 on volume of 3.4m shares;
  • Centro Properties Group (CNP), +$0.050 (0.85%) to $5.950 on volume of 1.11m shares; and
  • General Property Trust (GPT), +$0.020 (0.52%) to $3.900 on volume of 6.15m shares.

The bronze today went to XFJ Financials which gained 0.32% to 5187.70 points. The sector was led by

  • FKP Property Group (FKP), +$0.200 (5.14%) to $4.090 on volume of 1.7m shares;
  • Promina Group (PMN), +$0.090 (1.92%) to $4.780 on volume of 8.3m shares;
  • Record Investments (RCD), +$0.110 (1.78%) to $6.300 on volume of 464,000 shares;
  • Australand Property Group (ALZ), +$0.030 (1.67%) to $1.830 on volume of 1.57m shares; and
  • SFE Corporation (SFE), +$0.160 (1.4%) to $11.560 on volume of 142,000 shares.

The worst-performed sector today was XUJ Utilities which lost 0.60% to 5126.80 points. The sector was dragged lower by

  • Alinta (ALN), -$0.350 (3.11%) to $10.900 on volume of 811,000 shares;
  • Australian Gas Light Company (AGL), -$0.030 (0.21%) to $14.200 on volume of 967,000 shares;
  • Pacific Hydro (PHY), -$0.000 (0%) to $5.000 on volume of 0,000 shares;
  • Diversified Utility And Energy Trusts (DUE), -$0.000 (0%) to $2.650 on volume of 566,000 shares; and
  • Envestra (ENV), +$0.005 (0.43%) to $1.165 on volume of 215,000 shares.

Just in front of last place on the sector table was XTJ Telecommunications which lost 0.45% to 1683.30 points. The sector was pulled down by

  • Telstra Corporation (TLS), -$0.030 (0.64%) to $4.680 on volume of 31.85m shares; while
  • Telecom Corporation Of New Zealand (TEL) rose, +$0.030 (0.54%) to $5.610 on volume of 2.77m shares.
Sector Indices
CodeGICS SectorClose+/-%Volume
XSJConsumer Staples5833.652.70.91%24.19m
XPJProperty Trusts1848.68.40.46%74.01m
XXJASX200 Financials ex Property Trusts5286.814.60.28%58.45m
XDJConsumer Discretionary2321.2-4.2-0.18%32.03m
XIJInformation Technology432.1-1.9-0.44%4.72m

All Ordinaries Major Movers

All Ords Volume Leaders
TLSTelstra Corporation4.68-0.03-0.64%31.85m
MOFMacquarie Office Trust1.3100%22.06m
DYLDeep Yellow0.1100%15.57m
BHPBHP Billiton20.4700%13.86m
OSHOil Search3.62-0.01-0.28%13.58m
LHGLihir Gold1.33-0.02-1.12%13.38m
All Ords Percentage Gainers
OECOrbital Corporation0.120.019.09%2.57m
CABCabcharge Australia5.80.346.23%526204
MSTMetal Storm0.270.026%1.08m
AHDAmalgamated Holdings4.50.255.88%501597
All Ords Percentage Decliners
LYCLynas Corporation0.17-0.02-10.53%586470
ETWEvans & Tate0.22-0.03-10.2%830947
RSGResolute Mining0.86-0.09-9.47%2.63m
KRSKresta Holdings0.23-0.02-6.25%498664
BGFBallarat Goldfields0.24-0.02-5.88%3.47m

Elsewhere in the Region...

Regional Indices
New ZealandNZSE503353.1141.50.04%26.34m
JapanNikkei 22512413.6-39.54-0.32%0
SingaporeStraits Times2273.685.190.23%0
Hong KongHang Seng14829.16-93.06-0.62%191.88m
MalaysiaKLSE Comp913.561.710.19%0