Tag Archives: stock market crash

Leading Australian Stock-Picker: Barnaby Was Right

11 May

Southern Cross Equities’ Charlie Aitken tells his clients to get out of the stockmarket and into cash:

Aitken says anyone looking closely at the markets at the moment has to entertain the possibility of something they have not seen before. “[Nationals senator] Barnaby Joyce was ridiculed last year for saying this, but I’m prepared to say that some sort of US debt default is now on the table as a risk for investors. I never thought I would say that. You would have to say that is the biggest black swan of them all.”

The term black swan refers to a completely unexpected, utterly improbable event. In the investment market sense, a black swan is a scary prospect, with its connotations of a sudden market fall. The origin of the term is in the astonishment of the Dutch explorers who arrived at the Swan River in the 17th century and discovered that swans could be black, when to all European experience they were only white.

Aitken joins ANZ chief Mike Smith, Toscafund’s global currency expert Savvas Savouri, ABC’s Inside Business and Business Spectator‘s Alan Kohler, credit rating agency Standard and Poors, CNBC TV “First in business worldwide”, Deutsche Bank, and Barack Obama, in conceding that Barnaby Was Right about the risk of US debt default.

Barnaby forewarned of the dangers to the global economy – and Australia – back in late 2009 through early 2010.

The “experts” are slowly, and finally catching up with the only politician in the country who is always on the ball.

More from Charlie Aitken – and independent derivatives expert Satyajit Das – in this must-read article.

GFC Wave II Coming?

7 May

From headline news around the globe (in this case, The Australian):

Wall Street Plunges On Eurozone Contagion Fears

US stocks plunged today in a flashback to the panicked trading of 2008 and at one stage the Dow was down almost 1000 points — its biggest intraday fall in history.

Investors fled everything from stocks and risky corporate bonds to commodities and poured money into safe assets such as US Treasuries and gold.

The US stockmarket fell for a third-straight session, as jittery investors grew even more restless over southern Europe’s festering sovereign-debt woes.

The sell-off turned ugly quickly, with Bank of America, Procter & Gamble and 3M among the big decliners, as potentially erroneous trades accelerated the drop.

The Dow Jones Industrial Average ended the session down 347.80 points, or 3.20 per cent, to 10,520.32, its biggest point drop since February 2009. The average at one point fell as much as 998.50 points, or 9.2 per cent, the biggest intraday drop in its history.

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