Western Australia - Colin Barnett

The Mines' capital of the world wants to meet with the factory of the world. Premier of Western Australia, Colin Barnett, representative of the raw material capital of the world wants a stronger link with the Factory of the World. The Companies of the West & the world buys from the Factory who gets a substantial share of it's raw material from Western Australia.

Colin Barnett, Premier of the State that plays a crucial part in this production supply chain has a vision not necessary for Australia but definitely wants to make his mark and difference in and for WA.

After Barnaby Joyce of Queensland, Colin Barnett will be the next visionary and entrepreneurial premier.

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http://www.businessspectator.com.au/bs.nsf/Article/Kevin-Rudd-China-government-consumption-growth-Rab-pd20110531-HD5EN?opendocument&src=rss

West Australian Premier Colin Barnett's bold claim on Friday that his state was looking "over the horizon" past Canberra to forge stronger links with China capped off a few weeks of strong rhetoric from our politicians on relations with our biggest trading partner.

Barnett's comments should be viewed in the context of his state's running battle with the federal government over mining tax royalties, but they nonetheless highlighted the complex and multi-tiered way that Australian governments and businesses engage with China.

Why Hedge Fund Mania ? &......Infrastructure Mania

http://pensionpulse.blogspot.com/2011/05/pensions-leap-back-to-hedge-funds.html

On the other hand, the mania with hedge funds is sowing the seeds of the next financial crisis. It won't happen anytime soon, but when billions are being poured into hedge funds, regulators better pay attention to macro systemic risk. The role that large hedge funds and large bank prop desks played during the last credit crisis is still poorly understood. Economists still can't figure out the linkage between hedge fund asset growth, liquidity, credit conditions, financial leverage, asset bubbles, financial crisis and their effect on the real economy.

Over the last two and half years, I've been getting blasted on Zero Hedge for telling investors to keep buying the dips. My view remains that the financial oligarchs will do whatever it takes to reflate risk assets and introduce some inflation in the system. By allocating more and more assets into hedge funds, public pension funds are able to bypass the leverage constraints they have in their traditional assets and they are also introducing a boom in liquidity into the global financial system, thus helping the financial oligarchs achieve their goal of relating risk assets and introducing inflation in the economic system. Absolutely nothing has changed, which is one reason why I expect a lot less volatility going forward (less, not more because everyone will be bidding up risk assets).

Eventually the music will stop, most likely when the Fed signals the start of a rate hike campaign, but there is so much liquidity and leverage in the financial system that it will take several rate hikes before we see speculative activity tapering off in any meaningful way. In the meantime, global pensions and sovereign wealth funds will keep pouring billions into hedge funds and other alternative asset classes.

What are infrastructure investments?

http://www.ceoforum.com.au/article-detail.cfm?cid=6309&t=/Kirsty-MackayFisher-Berkley-Group/Understanding-infrastructure-investments

What are infrastructure investments?
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There are various definitions of what constitutes infrastructure, but generally infrastructure refers to the large-scale public systems, services, and facilities of a country or region that are necessary for economic activity. The sector tends to be separated into two broad subsets - economic and social. Economic infrastructure includes highways, water and sewerage facilities, and energy distribution and telecommunication networks whereas social infrastructure encompasses schools, universities, hospitals, public housing and prisons.

Infrastructure assets are generally characterised by high development costs (high barriers to entry) and long lives. They are generally managed and financed on a long-term basis. Historically it was seen as the role of the government to fund and manage these assets for the good of the population. Today, the role of the government as the provider of public services is increasingly being questioned both in terms of the absolute cost to taxpayers and as to whether a government can deliver the assets as efficiently as a private company competing for the privilege. From the government's perspective there is a strong case for privatisation, where the debt raised by the private partner remains on their balance sheets, not on that of the Treasury's. These factors have resulted in a gradual migration from the public provision of infrastructure to the private sector. The private provision of these assets may take many forms from joint ventures, concessions and franchises through to straight delivery contracts. Essentially the private sector is being brought in to design, build, finance and/or maintain public sector assets in return for long term contracted payments from the government or access to the revenues generated from the asset.

From Equities to Infrastructure

Brown Outs. Australia. Developed nation, First world faces brown outs? The global investment theme is Infrastructure investment. Whether it's America or China. Australia or Indonesia. Looks like it's going to be a decade of repairs.

Funds flow analysis. From money reservoirs like pension funds, super annuation to infrastructure projects.

From equities, basically stock market to infrastructure investment.

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http://www.businessspectator.com.au/bs.nsf/Article/NBN-broadband-infrastructure-Telstra-brown-outs-IR-pd20110531-HCSJF?opendocument&src=rss

As I thought about what Eddington said I realised that higher interest rates, the carbon mess, the big investment in housing and other forces have lessened the community's ability to raise the capital needed to fund city and other non-mining infrastructure. Banks are going to need local capital to lessen their dependence on overseas borrowing while the value of non-mining equity is under pressure given current conditions.

The only way to raise hundreds of billions on the local market is to entice superannuation funds to invest in infrastructure instead of equity or other interest bearing securities. Eddington doesn't favour compulsion. Almost certainly overseas investors will be required.

Chevron : CVX

CVX is in a triangular consolidation pattern.
Waiting for a breakout.

Emerging mkt equity funds see outflow of $1 bn last week

DISH

Q : which of this DISH chart is correct ?

Has DISH just traced out a complex a-b-c-d-e Wave 4 ?
and heading towards WAVE 5 ?
(take note that hourly chart is extreme O/B)

Or has it just as the hourly chart suggest, prices has topped out a 5th wave ?

AT&T

AT&T : T

Another final 5th wave up ?

Yes ! Put Western Australia on the World Financial Map

Go Colin Go !
Put WA on the world map.

Joining a line of dignitaries visiting the Queen. This is Colin Barnett's turn to go to London.
To discuss the Queens' traveling arrangement for her visit to Perth. Ummm... Ok, maybe that's a politically correct protocol, but please don't patronize the readers if it's not.

http://www.watoday.com.au/wa-news/premier-to-meet-queen-on-12day-tour-20110530-1fc4k.html

Play Natural Gas, Buy Russia's Gazprom

http://blogs.forbes.com/kenrapoza/2011/05/29/why-russias-gazprom-is-a-buy/

Hedge Fund News

http://www.investmentnews.com/article/20110529/REG/305299994

OPEC fiscal oil production break even price rises to $85 & projected $110 in 2011

Fiscal break even prices for oil production in OPEC country including Suadi Arabia rises to fund Increase spending & development in the region especially in light of the recent Political development nicknamed Arab Spring.

So why does Prince Alaweed say price will come down to $70-$80.

Is there some political wrangling going on here ?

http://www.marketwatch.com/story/arab-oil-faces-higher-break-even-price-2011-05-29?pagenumber=2

Suadis Arabia Money Supply increased

http://www.saudigazette.com.sa/index.cfm?method=home.regcon&contentID=20110530101879

The World needs Major Repair : $6 Trillion dollar Overhaul bill

http://www.dailymarkets.com/stock/2011/05/27/global-infrastructure-a-6-trillion-opportunity/

Each week, more than one million people are either born in or migrate to cities around the world. Much of this rapid urbanization comes from the emerging world, putting tremendous pressure on that country's feeble infrastructure. Pipes burst, roads are jammed, the water is tainted and the lights even go out.

Merrill Lynch estimates that $6 trillion will need to be spent by selected emerging market countries over the next three years to meet the basic needs of these citizens. Water, transportation and energy investments will consume the bulk of these funds, accounting for 82 percent of total projected spending. Nearly every emerging market country Merrill researched will make an investment in all three.

While each developing country could benefit from an upgrade, needs vary. This table details how different emerging market countries stand up against each other in terms of quality for the country's roads, rails, ports, etc. We've highlighted the specific areas where the countries rank in the bottom half among the 133 surveyed by the World Bank.

Hedge Funds heads East : $3,000,000,000,000 ( $3 trillion) by 2013

Hedge Funds heads East : $3,000,000,000,000 ( $3 trillion) by 2013. Singapore wants to be the home of it. At least be the Business Center for Hedge Funds, providing, banking & IT support services. Which could mean also a tax & regulatory haven for Global companies & Funds.

Asia thru trade surplus and savings has pooled a sizable reservoir of monies over the 2 decades. According to some report, 80% Total bank deposits in China belongs to 20% of the depositors base making any movement even easier as the decision making is in the hands of the few.

Hedge Funds are taps of this Reservoir of Monies.

http://www.ctpost.com/news/article/Deutsche-Bank-sees-five-Asia-billion-dollar-hedge-1399648.php

"It reflects the macro-economic situation that has developed globally," Bausano said Thursday. "We definitely see an increasing movement of activities East. There's demand for really high-quality groups that can run capital in sophisticated hedge-fund strategies that are capable of giving the types of risk-adjusted returns their end investors are demanding."

Global hedge fund assets may hit $3 trillion by the end of 2013, Bausano said. Hedge Fund Research Inc. estimated the assets at a record $2.02 trillion by March this year.

Pension plans in developed countries, sovereign wealth funds and endowments are looking for higher returns than those offered by passive investments such as exchange-traded funds to bankroll expected liabilities as their populations age, he added.

"If your asset-liability mismatch is growing because of demographics, you need to ensure that part of your portfolio incorporates higher-yielding assets, like hedge funds, to close the gap," he said.

China Friendly ? Taiwan legalize communism advocacy.

http://www.bangkokpost.com/news/asia/239402/taiwan-makes-it-legal-to-advocate-communism

Coffee ETFs

http://www.minyanville.com/businessmarkets/articles/coffee-beans-hot-stocks-etfs-best/5/27/2011/id/34816

Basel III adamant to go ahead

Basel III adamant to go ahead.

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8542490/Michel-Barnier-will-not-be-swayed-on-Basel-III.html

Wheat Economics : Ruusia ends ban

http://www.bloomberg.com/news/2011-05-28/russia-will-end-grain-export-ban-on-july-1-as-planting-climbs-putin-says.html

Is Australia RBA in Australia ??

(click on picture for bigger image)

Global Interest Rate looks set to rise.

Bank's capital adequacy ratio to go up.
Money supply will decreased.
Credit squeezed.

Meaning to say
Less money to lend out,
And lend at higher rate.

China already forecast that growth will slow,
Still at a high rate but slower.

Anyway RBA, is saying in a nutshell is, ALTHOUGH,
Interest rates, global interest rates will rise,
Housing & Commodities will still be ok.
2 of Australia's economy component
So,

Either the
RBA is reading a different economic report,
RBA Can't handle the truth
RBA Can't be the bearer of bad & painful news
RBA Can't be and don't want to be the bad guys
RBA is not in this world
RBA is not in Australia

I will leave this 3 article here, hopefully for everybody else that have mortgage to pay & still need a job, these words from RBA will not come back to haunt them

Sources references :

http://www.smh.com.au/business/rba-says-mortgage-stress-not-a-problem--for-now-20110526-1f53c.html

http://www.smh.com.au/business/rba-dismisses-commodity-price-bubble-talk-20110526-1f5b4.html

http://www.theaustralian.com.au/business/industry-sectors/modest-credit-growth-ahead-says-reserve-bank-deputy-governor-ric-battellino/story-e6frg96f-1226063213034

China's Total Bank Depositors : 80% of total deposits in hands of 20%

China's Total Bank Depositors : 80% of total deposits in hands of 20%.

http://en.wikipedia.org/wiki/Hedge_fund_industry_in_the_People's_Republic_of_China

Against the background of China's fast growing economy, the number of hedge fund investors is increasing rapidly in the country, and the total amount of their wealth is increasing in step. By the end of June 2008, China's residents had RMB 19,460bn ($2,820bn) in bank deposits, of which 80% was in the name of 20% of the population.[citation needed] With such a huge amount of cash assets in hand, the wealthy's strong investment demand has provided hedge funds in China with a sufficient supply of capital. In addition, China's companies also have a huge sum of spare cash, which is also a primary source of capital for hedge funds

Arab Spring to get $20B

Democratization, Privatisations of Arabs states gets further entrenched, legitimized & reinforced by G8's $20B pledge.

Free market economy. Innovation & creativity to follow.

http://arabnews.com/middleeast/article434733.ece

DIA : Weekly Price Action

DIA : Weekly Price Action
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Although upward trend is still firmly intact.
MA, price channel is still traveling upwards.
There might be some volatility in the near term.
$115 low on the trend channel may still be tested.

As Wave 4 of this current Wave.

DIA - Diamonds of Dow Jones Index

Price Action :
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Prices broke $125 support.
Gaped down to $123 lingered for 4 days.
Came up on Memorial Day weekend eve to retest the ex-support at $125.

Battle of bulls & bears begin.
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Bears have the MA, declining volume, Support turn resistance line, downward sloping trend line and Doji candlestick moment of bull indecisiveness, in their favor.

Bulls have the upward turning O/S Stochs on their side.

Looking for more downward bias.

Colnial Days's World Map

Japan Reversal of a long financial drought in the making ?

Japan Reversal of a long financial drought in the making ?

So the Trio Crisis has a silver lining after all. Ending the 25 months of deflation that feels more like 25years.

Seems like there is a tsunami of reversal here.
US interest rates going up. Ending cheap source of funding.
Global interest rates go up.

Oil prices comes down.
US$ goes up.
Equities come down (?)

http://www.bloomberg.com/news/2011-05-26/inflation-hits-japan-for-the-first-time-in-more-than-two-years-after-quake.html

S&P 500 trading above Historic average

http://www.smartmoney.com/invest/stocks/the-invisible-stock-bubble-1305647031991/# 

in the making, but this time the signs are less obvious. U.S. stocks, despite having racked up a decade worth of typical gains in the 26 months after their recessionary low, do not look expensive. The S&P 500 trades at 15.3 times trailing earnings, only a smidgen above its historic average of 14.5.

RedHat

A bearish interpretation for RedHat.
Currently Prices is in. Wave C down.
In that wave C wave 4 is in progress which correspond to the low Stochs
And again don't confuse Stochs amplitude with price magnitude
A corrective wave.
Once Wave 4 is finished...another good entry to short
For target of $40 for gap to fill

Coca Cola : KO (?)

Stochs is on the low side, may correct upwards but don't confuse magnitude of correction with Stochs level.
Current level may act as temporary support.

Double top with Bearish Divergence between Price & Stochs.
If price structure breaks...aim for $61.5

Afghan Riches : Spoils of War

Afghan Riches : Spoils of War.
1. Rare Earths
2. Gold
3. Copper
4. Iron
5. Lead
6. Zinc
A win win for the US and the Afghanistan people and Middle East as a whole.

May23 2011 : Fortune Magazine

Dubai's Disneyland

Outright Americanization of the Middle East may be a too far fetched concept considering it's still an Islamic region with Islamic values however to hear of a "Dubai-Land" some sort of Arab's version of America's Disneyland should not have been too surprising as American "stuffs" does have a way to creep into a society, like MTV, Ophrah, Mcdonalds, Starbucks and of course the I-phones and the I-Pads.

Like it or not, although USA may not be the largest economy in the future, it's icons are still something people aspire for. People that enjoy life do think of new ways to enjoy it and consuming more is part of that process which some may argue is the cause of the problem. Debatable.

Problem is credit. It's fiat money. Creating money by printing more "In God We Trust" - $US dollars which has these words inscribed on it. Like the song goes, making love out of nothing at all. But USA is a great consuming society & they know how to be one that demands the best out of their corporations ingenuity & creativity and of course the flip side of it is the ugly nature of human beings, greed.

That's another story by itself. The point here is no other country has come close in offering new products that the world desires with a passion consistently & universally.

http://www.arabianbusiness.com/dubai-needs-disneyland--boost-tourism-402200.html

Monetary Funds has grown up.

Monetary Funds :
The mother of all Monetary Fund,
The International Monetary Fund

Then there is the Arab Monetary Fund for the Middle East.
The Latin American Reserve Fund for South Americas.

And 2 proposed :
Asian Monetary Fund which is in progress.
European Monetary Fund is in progress.

FASB : Reining In ETFs - Equities Funds.

First we have countries in danger of defaulting their sovereign loan.
Secondly, banks ratings got cut by S&P and Moody's
Thirdly, OECD urge banks to raise interest rates.
Fourthly, IASB in accord with Basel III wants to raise bank's capital ratio
Fifthly, Hedge Funds to be looked into for transparency.
And now,
Sixthly, FSB, financial stability board wants to regulate ETFs.

All of a sudden there is this craze in controlling risk.
All these cannot spell good for the Equities market.

http://blogs.reuters.com/financial-regulatory-forum/2011/05/25/global-regulators-raise-fears-over-exchange-traded-funds/

Middleast Update : A Release Valve Open

The decades long Israeli-Palestinian pressure cooker issue now has a release valve with the opening of the Egyptian-Rafah border to ease social tension. That should at least buy some time if not break the mounting tension. It should also dilute the Palestinan heat on the Israeli.

Royal Carribean Cruises : Weekly chart.

Royal Carribean Cruises : Weekly chart.

RCL : Royal Carribean Cruises.

Major trend is down.
Prices remain below the 50 & 200 MA
Weekly EMA tested the MA20 and pulled away downwards.
Looking for prices to work itself lower
Amidst strong waves from the financial Mkt.

Money flow between Assets classes.
Are there better assets than equities ?
I think financial Mkt is like cash accounts nowadays.
Most liquid of assets.
Short of no other more liquid assets that generates a better return,
equities is the best place to be in.
However If there is another asset class that offers a better, safer return
Monies will flow out of equities.
It's kind of "safe haven"

However surplus monies are channeled to better pastures when one is found.
Like real tangible assets like Infrastructure, state businesses.
Countries Bonds.
Besides politicized money.

RHT : RedHat : 200Days MA is to be respected.

RedHat : RHT

The 200Day MA
Is to be respected.
No one pass thru without my permission.

The NorthEast Asia's Musketeer : Korea-Japan-China

The NorthEast Asia's Musketeer : Korea-Japan-China
One for All and All for One !

A formidable force to be reckon with.
However it's not for competition
But garnering of natural resources into a bloc.

Imagine what this group can do financially & culturally.
Culturally it is more homogeneous than say the South East Asia countries.
At least the NE Asia may have more link historically vs the SE Asian.

SE Asia still remains loosely knitted.
So the North will still influenced the South.
Be it in Europe, Americas or Asia.
And the West influenced the East.
In this regard, Singapore is trying her hardest for her voice not to be drowned.
As long as she plays the part of a global business center,
And a tax & regulatory haven for the global companies.

Regional Stock Exchanged

The trend to consolidate stock exchanges globally continues well with the announcement of MILA - the grouping of 3 South American bourses on the West Coast of the continent. Chile, Colombia and Peru.

It joins the group of merged Stock Exchanges. London & Toronto. NYSE & EuroNext & potentially Deutsche Bourse.

Attempted but failed mergers include London & NASDAQ , ASX & SGX.

America & Europe as northern grouping.
Australia & Singapore as the Southern Asian grouping.
South America as one grouping.

Soon to be announced will be Middle East stock exchanges mergers.

http://www.marketwatch.com/story/chile-colombia-peru-launch-andean-stock-exchange-2011-05-25
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For companies aiming to raise funds, the integrated exchange will be able to increase the number of potential investors, said Alfredo Coutino, director of Latin American

Peru, whose main export is gold, and Chile, the world's largest copper producer, are expected to have the fastest rates of economic growth in Latin America this year, with the International Monetary Fund forecasting Peru's expansion at a rate of 7.5% and Chile's at 5.9%. The IMF expects the countries to lead growth in Latin America in 2012.

The Coming Money Sqeeze !

Money becoming scarcer & more expensive.

Central banks to up interest rate. Turning off the money tap. Era of cheap money coming to an end. Money supply to slow down. Volume of money disappearing.

Commercial banks ratings got cut. Australian banks,China banks and Euopean banks.So as to be less risky, higher capital ratio is needed. Again lesser money to lend out as more capital needed for reserve to meet the Basel III requirement as stated by ISAB. Volume of money diminish.

Speculative money will be dry up. Less money in the market.

Middle East Aid.

Just a snapshot of which middle east or Arab countries receiving aid from abroad.
Aid to the ally countries. Sanction to the hostile.
A typical textbook carrot and stick approach to parenting.
Spare the rod, spoil the child.

Source : (unknown date)
http://www.publicradio.org/columns/marketplace/business-news-briefs/middle-east-us-aid-map-FINAL-corrected.jpg

Higher Bank Capital Ratios : IASB

Where did the recent spate of bank's credit rating by American rating agencies namely S&P and Moody's come from ?

Back track to April 10 2011, a private accounting board albeit international in nature, the International Accounting Standard's Board, states that Bank's capital ratio should be 30% higher probably after being consulted by BASEL III committee that sets banks capital ratios.

Meaning lesser money in the system. And the reverse of leveraging or deleveraging occurs. Just like if the boss keeps more in the kitty, there is less bonus, & less dividend to distribute. So lesser money or lesser credit, more recalling of loans, margin call, will send repercussion ripple effect through the market. Asset values will fall.

http://www.ibtimes.com/articles/132538/20110410/accounting-chief-wants-higher-bank-capital-ratios.htm

GMCR : Green Moutain Coffee Roast

GMCR : Green Moutain Coffee Roast.

Has traced out 5 waves in the weekly, daily and hourly chart.
Its the final of the final wave in this drmatic rise.
A reversal has yet to be seen.
Stochastics are running into the O/B extremes.
Signalling a reversal is imminent but yet to be seen.
Yesterday open was a gap up, worked itself down in a couple of minutes
but formed a bearish dragonfly doji at end of day where the opening and closing price are the same on the hourly chart
Meaning to say, the bulls gave ways to the bear at the open but manage to trade themeselves up last minutes.

Expect to see a reversal candlestick pattern next few days.
This run is over subject to reversal.

RedHat : RHT update

RedHat : aka RHT

Prices has broken 2 candles out of the Box consolidation from $45.
Topped is in place.
How far will price go ?
Next target $40 ??
$3 from here.

Stochastics is still pointing south on the daily chart.
Probably at the highest rate of descend at the moment.
On the hourly chart it already is scrapping the bottom.
Basicallys its on the outfield at the moment.
Given the situation it will not be surprising.

Target priority will be given to the wave formation and the moving averages.
$40 maybe touch and go.
Get ready to move in a heart beat !

Standard & Poors : The World Credit Rating Agency : Chin's Report

Why is an American company going round the world rating each countries' credit standing.
Who is setting thiese standards ? Who decides Who is poor ?
Standard & Poor aka as S&P.

Having said that China has entered the credit cycle that affects all modern banking system.
The day that commercial banks were allowed to lend and people allowed to borrow,
it has set in motion market cycle, credit cycle that eventually leads to a bubble just becasue
of human's need for expansion.

According to this article, S&P is not even saying IF a credit risk is imminent,
its saying watch out, its coming.
Its only a matter of degree and when it comes it will be not that bad.
Just like telling a child who is about to be given an injection.
Candies will be given to soothe the pain, but first the pain that will make you better and you get a
lolly even for something that is good for you.

Or like the father that has to spank you becasue you have overspend but who had not stop giving
you allowances everytime you ask.

China has been warning about surge in property prices, has put in measure to stop its dramatic rise. Cooling
credit growth is just like saying I am going to decrease the amount of money in the market. With lesser money, demand comes down, especially speculative demand not real demand.