Cold Turkey

Really there is nothing going on..... It was a pleasant surprise that Australia escaped the popular definition of recession. Stocks markets globally are happy.

I guess now the big question is where do we go from here ? the truth is no one knows.

A more interesting question is where do the world economies go if the governments stop pumping money into the system now that they work out we are not looking into the abyss.

Will the Joe oridinary consumers modify their behaviour following their experience in the past year ?

It is never easy if an addict has to go cold turkey from the banned substance.....

Green Shoot = Green Tree ?

By now, you would have heard about all the "green shoots" sprouting everywhere. Ignore Australia for the time being, it is probably fair to say that the environment has "stabilised". The environment is still bad but at least we are not starring into a bottomless abyss. But then stock markets globally have rallied a great deal in anticipation already. The words from the brokers remain that plenty of funds have missed the bounce and are still catching up.  The easy trade is to ride the current momentum trade. But it has just been too easy. Personally, I am starting to lighten up. I am not too concerned if I am too early. The truth is I am playing from a position of strength. Not to mention, the stock market (US in particular) is acting particularly inconsistent. Last week, the retail stocks were acting weak after a good run. The US treasuries did not act particularly well. Think 30-year is around 4.4-4.5%. The VIX has drifted down to 30ish. I just don't see the point of taking on this massive macro bet that the world is mending and 2010 is set to be the recovery year. Maybe the market will have a bit of a dip before resuming the ascent....Or go straight up along with the Green Tree....I just don't know.

Meanwhile, the Sydney LNS property market is doing just fine. Same story. Stocks that have not been sold for awhile were sold. It does look like the property buyers are climbing on the Green Tree as well. Arghhhhhhhhhhhh....Like I said before, there are no distressed sellers out there. There are only distressed buyers. It never cease to amaze me how many rich folks are out there in Sydney. Still, it would be interesting to see what happens when more stocks come on the market.....Time will tell.