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So let's see if I've got this right. A bank can borrow ungodly amounts of money at an interest rate rate below the rate of inflation, set by some set of politically-appointed career hacks; it can practice fractional reserve lending (loaning a staggering multiple of the money it holds on deposit); it can leverage itself up 30-odd times; it can revalue the 'assets' it buys on a whim, using nothing but its own 'in house model' (which is an Excel spreadsheet that uses Solver to find the value that is required to boost earnings enough so that all the managerial staff get bigger bonuses).
And when all of that chicanery comes undone, and Madame Market comes to bite the arse of anyone stupid enough to still hold their stocks, the banks cry poor and whine to government ... who nationalise the failures, then pump a quarter of a trillion dollars into financial markets in a week, and when that doesn't work they promptly ban the short sale of financial stocks.
Are they serious? Do they seriously think that the fall in bank stocks is due to short sellers? Come ON.
Nobody ever made money shorting the stock of a company that was being run properly - Not even back in the Jesse Livermore days. The idea that short-selling a stock can undermine a fundamentally-sound enterprise is absolute hogwash. In fact, it is almost impossible to make money shorting any instrument that has sound fundamentals (which is why I have not shorted metals or energy futures since before the year 2000).
The market is already hugely tilted against short selling - you have to borrow the stock, pay interest as well as dividends, pay additional exchange fees, and you can't sell except on an uptick.
And what's more, this will not stop short positions in bank stocks: all that is required to construct a synthetic short in a specific bank is to buy a put, or - to get big-time leverage - to sell a call and buy a put.
So in other words, the UK and US government either deliberately lined the pockets of option market makers, or displayed once and for all that they have bugger-all understanding of financial markets. My guess is the latter - and it also shows the extent to which these career parasites are prepared to try and pervert the workings of the market. Remind me again why we spent trillions on the Cold War?
I admit that a third option exists - that this was purely an "announcement play"... the sort of thing that is done by the management of unscrupulous brokerages when they have a large tranche to sell on behalf of an institutional client: have an analyst write a glowing research note indicating that a stock is on the verge of a big move up, and sell the insto tranche to your own retail clients... and pocket double the brokerage.
So what's going to happen when this little propaganda-driven bump upwards doesn't work? Are they going to ban all sales - make the stock market something that you have to buy for keeps?
Still, you ought never be surprised at the deplorable depths to which scum like Gordon Brown will sink. After all, this is the genius who sold the UK government's gold at a 20-year low in the price of gold: the decision has already cost the UK treasury billions of dollars. As Brokeback-cowboy George the Turd might say, Heckuva job, Brownie.
Little wonder he has had to leech from the public bloodstream for his entire woebegone career: if his private decision-making is half as woeful as the decisions he has made on behalf of the UK government, he must have been on the bones of his arse by his mid-teens.
So a bunch of short sellers closed positions yesterday arvo in the US - driving the Dow up over 500 points between 1 p.m. and the close - 400 of those points coming in the last 90 minutes. Healthy? Don't you believe it.
I notice that nobody seeks to stop highly-leveraged long-side speculation in housing or stocks... but leveraged long side speculation in oil is on a par with membership in the fictional "al-Qaeda" movement. When oil resumes its bull market, watch for nongs like Gordon Brown to talk about banning speculative BUYING in oil futures.
Major Market Indices
The broad market - the All Ordinaries (XAO) - surged a whopping 188.8 points (4.06%), finishing at 4840.7 points. The index hit an intraday high of 4856.6 at 11:57 am, while the low for the day was 4651.9 - set at 10:00 am Sydney time. Banks were the big gainers, as recent political events show that bankers will be protected by the men who rape the paypackets of the masses and squander the proceeds: in short, the bankers will be saved from their own stupidity, even if it means beggaring the entire world.
Total volume traded on the ASX was 2.02bn units, 52% above its 10-day average. The ASX's daily listing of all stocks included 1355 different 3-letter FPO's which traded (i.e., had non-zero trade volume). Of these, 785 issues rose, with volume in rising issues totalling 1.48bn units; decliners numbered 291 counters, and between them they traded aggregate declining volume of 410.6m shares.
Of the 490 All Ordinaries components, 323 rose while 107 fell. Volume was tilted in favour of the gainers by a margin of 3.7:1, with 1.25bn shares traded in gainers while 337.35m shares traded in the day's losers.
The Index that forms the cash basis for the SFE's Share Price Index Futures - the S&P/ASX 200 (XJO) - hurtled skyward to the tune of 196.8 points (4.27%), closing out the session at 4804.1 points.
| Name | Close | +/-(%) |
|---|---|---|
| All Ordinaries | 4840.70 | 188.80 (4.1%) |
| ASX 20 | 2744.70 | 132.90 (5.1%) |
| ASX 50 | 4725.30 | 215.40 (4.8%) |
| ASX 100 | 3910.80 | 168.50 (4.5%) |
| ASX 200 | 4804.10 | 196.80 (4.3%) |
| ASX 300 | 4793.70 | 195.30 (4.2%) |
| ASX Mid-Cap 50 | 4782.70 | 132.50 (2.8%) |
| ASX Small Ordinaries | 2604.60 | 47.60 (1.9%) |
The "heavy hitters" of the Australian market - the ASX 20 Leaders (XTL) - had a bit of a moonshot, stacking on 132.9 points (5.09%), closing out the session at 2744.7 points. The 20 stocks which make up the index traded a total of 263.1m units; 16 index components rose, with rising volume amounting to 236.02m shares, while the 4 decliners had volume traded totalling 27.07m units. The major percentage gainers within the index were
- Macquarie Group (MQG), +$9.85 (37.81%) to $35.90 on volume of 22.5 million shares;
- National Australia Bank (NAB), +$3.40 (17.35%) to $23.00 on volume of 28.3 million shares;
- ANZ Banking Group (ANZ), +$2.26 (14.63%) to $17.71 on volume of 21.8 million shares;
- AMP (AMP), +$0.69 (10.94%) to $7.00 on volume of 11.9 million shares; and
- Stockland (SGP), +$0.53 (9.72%) to $5.98 on volume of 12.4 million shares.
On the less salubrious side of the big-cap fence, the following stocks were the worst-performed within the index:
- Foster's Group (FGL), -$0.35 (6.11%) to $5.38 on volume of 15.5 million shares;
- Woolworths (WOW), -$0.71 (2.51%) to $27.53 on volume of 3.8 million shares;
- Brambles (BXB), -$0.06 (0.73%) to $8.11 on volume of 5.6 million shares; and
- CSL (CSL), -$0.25 (0.64%) to $39.00 on volume of 2.2 million shares.
The ASX Small Ordinaries (XSO) significantly underperformed its large-cap counterpart, but still performed solidly, in moving up 47.6 points (1.86%), closing out the session at 2604.6 points.
Among the stocks that make up the Small Caps index, 123 index components finished to the upside, and of the rest, 54 closed lower for the session.
The 194 stocks which make up the index traded a total of 513.45m units: volume in the 123 gainers totalling 293.73m shares, with trade totalling 180.26m units in the index's 54 declining components. The major percentage gainers within the index were- Rubicon Japan Trust (RJT), +$0.01 (28.21%) to $0.05 on volume of 2.1 million shares;
- OM Holdings (OMH), +$0.53 (27.89%) to $2.43 on volume of 6 million shares;
- Babcock & Brown Power (BBP), +$0.02 (25%) to $0.10 on volume of 8.6 million shares;
- Kagara Zinc (KZL), +$0.55 (25%) to $2.75 on volume of 1.9 million shares; and
- Bannerman Resources (BMN), +$0.13 (23.81%) to $0.65 on volume of 1.4 million shares.
In the red-zone of the little-stock index, the following list represents the biggest downers (in terms of percentage decline):
- APN/UKA European Retail Property Group (AEZ), -$0.07 (30.23%) to $0.15 on volume of 14.7 million shares;
- Centro Properties Group (CNP), -$0.02 (22.08%) to $0.06 on volume of 62 million shares;
- Australian Education Trust (AEU), -$0.08 (18.18%) to $0.36 on volume of 683.5 thousand shares;
- Rubicon America Trust (RAT), -$0.01 (16.67%) to $0.03 on volume of 1.9 million shares; and
- Record Realty (RRT), -$0 (11.11%) to $0.02 on volume of 1.4 million shares.
Index Changes
| Code | Name | Close | +/- | % | Volume |
|---|---|---|---|---|---|
| XAO | All Ordinaries | 4840.7 | 188.8 | 4.06 | 1676.1m |
| XFL | ASX 50 | 4725.3 | 215.4 | 4.78 | 695m |
| XJO | ASX 200 | 4804.1 | 196.8 | 4.27 | 1445.1m |
| XKO | ASX 300 | 4793.7 | 195.3 | 4.25 | 1563.9m |
| XMD | ASX Mid-Cap 50 | 4782.7 | 132.5 | 2.85 | 355.5m |
| XSO | ASX Small Ordinaries | 2604.6 | 47.6 | 1.86 | 513.4m |
| XTL | ASX 20 | 2744.7 | 132.9 | 5.09 | 263.1m |
| XTO | ASX 100 | 3910.8 | 168.5 | 4.5 | 1050.4m |
Market Breadth
| ASX20 | XTO | XJO | XAO | XSO | Market | |
|---|---|---|---|---|---|---|
| Advances | 16 | 79 | 146 | 323 | 123 | 785 |
| Declines | 4 | 18 | 42 | 107 | 54 | 291 |
| Advancing Volume | 236m | 892.6m | 1.1b | 1.25b | 293.7m | 1.48bn |
| Declining Volume | 27.1m | 150.6m | 305.2m | 337.3m | 180.3m | 410.6m |
GICS Industry Indices
Among the 11 industry indices, 8 registered an advance for the session, the remaining 3 lost ground.
The best performing index was Financials ex Property Trusts (XXJ), which added 436.9 points (9.79%) to 4899.9 points. The 30 stocks which make up the index traded a total of 205.38m units; 25 index components rose, with rising volume amounting to 186.64m shares, while the 3 decliners had volume traded totalling 9.29m units. The major percentage gainers within the index were
- Macquarie Group (MQG), +$9.85 (37.81%) to $35.90 on volume of 22.5 million shares;
- National Australia Bank (NAB), +$3.40 (17.35%) to $23.00 on volume of 28.3 million shares;
- Australia And New Zealand Banking Group (ANZ), +$2.26 (14.63%) to $17.71 on volume of 21.8 million shares;
- Bendigo and Adelaide Bank (BEN), +$1.42 (13.5%) to $11.94 on volume of 2 million shares; and
- AMP (AMP), +$0.69 (10.94%) to $7.00 on volume of 11.9 million shares.
Second in the index leadership stakes was Property Trusts (XPJ), which gained 96.9 points (7%) to 1481.7 points. The 21 stocks which make up the index traded a total of 362.76m units; 15 index components rose, with rising volume amounting to 254.53m shares, while the 6 decliners had volume traded totalling 108.23m units. The major percentage gainers within the index were
- Centro Retail (CER), +$0.02 (20%) to $0.12 on volume of 27.2 million shares;
- Goodman Group (GMG), +$0.43 (17.77%) to $2.85 on volume of 32 million shares;
- GPT Group (GPT), +$0.25 (15.15%) to $1.90 on volume of 57.2 million shares;
- Mirvac Group (MGR), +$0.37 (14.62%) to $2.90 on volume of 13.3 million shares; and
- ING Office Fund (IOF), +$0.15 (10.79%) to $1.54 on volume of 6.9 million shares.
The bronze medal for today goes to Industrials (XNJ), which climbed 173.5 points (3.9%) to 4619.5 points. The 32 stocks which make up the index traded a total of 273.28m units; 25 index components rose, with rising volume amounting to 224.73m shares, while the 4 decliners had volume traded totalling 25.75m units. The major percentage gainers within the index were
- Macquarie Infrastructure Group (MIG), +$0.31 (15.9%) to $2.26 on volume of 98.8 million shares;
- Asciano Group (AIO), +$0.35 (11.67%) to $3.35 on volume of 5.8 million shares;
- Alesco Corporation (ALS), +$0.45 (8.52%) to $5.73 on volume of 744.5 thousand shares;
- Macquarie Airports (MAP), +$0.18 (8.11%) to $2.40 on volume of 56.2 million shares; and
- Transurban Group (TCL), +$0.44 (8%) to $5.94 on volume of 13.6 million shares.
The worst-performed index for the session was Utilities (XUJ), which dipped 108.1 points (2.29%) to 4607.7 points. The 10 stocks which make up the index traded a total of 79.02m units; The 4 decliners had volume traded totalling 7.9m units, and 4 index components rose, with rising volume amounting to 67.56m shares, The major percentage decliners within the index were
- AGL Energy (AGK), -$1 (7.08%) to $13.13 on volume of 3.2 million shares;
- Duet Group (DUE), -$0.06 (2.2%) to $2.67 on volume of 1.7 million shares;
- Hastings Diversified Utilities Fund (HDF), -$0.04 (1.5%) to $2.62 on volume of 608.7 thousand shares; and
- Spark Infrastructure Group (SKI), -$0.01 (0.31%) to $1.60 on volume of 2.3 million shares.
Just missing out on the wooden spoon was Healthcare (XHJ), which slid 56.3 points (0.6%) to 9317 points. The 8 stocks which make up the index traded a total of 13.87m units; The 6 decliners had volume traded totalling 10.84m units, and volume in the lone rising index component was 0.4m shares, The major percentage decliners within the index were
- Sigma Pharmaceuticals Ltd (SIP), -$0.07 (4.93%) to $1.35 on volume of 2.9 million shares;
- Healthscope (HSP), -$0.09 (2.04%) to $4.32 on volume of 862.6 thousand shares;
- ResMed Inc. (RMD), -$0.08 (1.41%) to $5.60 on volume of 3.2 million shares;
- CSL (CSL), -$0.25 (0.64%) to $39.00 on volume of 2.2 million shares; and
- Ramsay Health Care (RHC), -$0.05 (0.49%) to $10.25 on volume of 614.5 thousand shares.
Third-to-last amongst the sector indices was Consumer Staples (XSJ), which slid 20.8 points (0.29%) to 7228.1 points. The 12 stocks which make up the index traded a total of 48.25m units; The 6 decliners had volume traded totalling 29.17m units, and 6 index components rose, with rising volume amounting to 19.08m shares, The major percentage decliners within the index were
- Foster's Group (FGL), -$0.35 (6.11%) to $5.38 on volume of 15.5 million shares;
- Lion Nathan (LNN), -$0.35 (3.88%) to $8.67 on volume of 1.5 million shares;
- Woolworths (WOW), -$0.71 (2.51%) to $27.53 on volume of 3.8 million shares;
- Coca-Cola Amatil (CCL), -$0.22 (2.45%) to $8.76 on volume of 3.7 million shares; and
- Metcash (MTS), -$0.08 (1.86%) to $4.21 on volume of 2.2 million shares.
Sector Indices
| Code | GICS Sector | Close | +/- | % | Volume |
|---|---|---|---|---|---|
| XXJ | Financials ex Property Trusts | 4899.9 | 436.9 | 9.79 | 205m |
| XPJ | Property Trusts | 1481.7 | 96.9 | 7 | 363m |
| XNJ | Industrials | 4619.5 | 173.5 | 3.9 | 273m |
| XEJ | Energy | 16627.3 | 613.4 | 3.83 | 60m |
| XDJ | Consumer Discretionary | 1681.4 | 57 | 3.51 | 70m |
| XMJ | Materials | 11940.2 | 166.8 | 1.42 | 281m |
| XIJ | Information Technology | 504.6 | 5.5 | 1.1 | 2m |
| XTJ | Telecommunications | 1405.9 | 10.5 | 0.75 | 66m |
| XSJ | Consumer Staples | 7228.1 | -20.8 | -0.29 | 48m |
| XHJ | Healthcare | 9317 | -56.3 | -0.6 | 14m |
| XUJ | Utilities | 4607.7 | -108.1 | -2.29 | 79m |
All Ordinaries Major Movers
All Ords Volume Leaders
| Code | Name | Close | +/- | % | Volume |
|---|---|---|---|---|---|
| MIG | Macquarie Infrastructure Group | 2.26 | 0.31 | 15.9 | 98.8m |
| CNP | Centro Properties Group | 0.06 | -0.02 | -22.08 | 62m |
| TLS | Telstra Corporation Limited. | 4.13 | 0.04 | 0.98 | 58.6m |
| GPT | GPT Group | 1.90 | 0.25 | 15.15 | 57.2m |
| MAP | Macquarie Airports | 2.40 | 0.18 | 8.11 | 56.2m |
All Ords Percentage Gainers
| Code | Name | Close | +/- | % | Volume |
|---|---|---|---|---|---|
| ARR | Arasor International Limited | 0.07 | 0.02 | 40 | 9.5k |
| MQG | Macquarie Group Limited | 35.90 | 9.85 | 37.81 | 22.5m |
| INP | Innamincka Petroleum Limited | 0.42 | 0.10 | 29.23 | 535.6k |
| RJT | Rubicon Japan Trust | 0.05 | 0.01 | 28.21 | 2.1m |
| OMH | OM Holdings Limited | 2.43 | 0.53 | 27.89 | 6m |
All Ords Percentage Losers
| Code | Name | Close | +/- | % | Volume |
|---|---|---|---|---|---|
| AEZ | Apn/Uka European Retail Property Group | 0.15 | -0.07 | -30.23 | 14.7m |
| CNP | Centro Properties Group | 0.06 | -0.02 | -22.08 | 62m |
| VGH | Vision Group Holdings Limited | 1.24 | -0.29 | -18.69 | 747.8k |
| AEU | Australian Education Trust | 0.36 | -0.08 | -18.18 | 683.5k |
| RAT | Rubicon America Trust | 0.03 | -0.01 | -16.67 | 1.9m |
