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Tuesday, May 11, 2010

Are yo-yos "in" again? It would seem, yes....

Anyone who knows me well, will attest to the fact that what I make up for with extreme intelligence and magnificent looks (hey, it’s my blog!), I lack in co-ordination. Hmmm, I have the bruises to prove it as I type.

So when yo-yos were all the rage, I was never able to master anything more than the basic up and down movement – and truth be told, I was pretty proud of that. I couldn’t flick my wrist, make it go sideways, or spin it.

As for walking the dog, well that sounded way too much like exercise to me anyway.

Many years later, I’m feeling like the yo-yo novice again watching the way the market has behaved over the past week. However this time, I don’t want to learn how to walk the dog, I’m more in need of the proverbial “hair of the dog”. Sheesh, what a week!

You’ve already read my “Riots, rumours, and rescues” blog (if you haven’t, see below), therefore I won’t bore you again with an explanation of last week’s sharemarket fiasco. But howsabout the past 24 hours eh????

Our market was up 2.5% yesterday, the US gained 4%, Germany (our villain from last week’s soap opera) and the UK both added over 5%, and Austria, Belgium, and France all gained just under 10%!!

Oh what a night…. do do do do do.

Welcome to the sharemarket folks, enjoy the ride.

The sharemarket is never a smooth ride, even after a large fall like we experienced up to March 2009. When recovering from a bear market, a subsequent bull run will have it’s fair share of “ups and downs”. There will always be weeks and/or even months when the markets will fall, and times when we will experience a significant rally very quickly. There will also be market “breathers” caused by bad news, rumours, and profit taking (I’ve always maintained that no one ever went broke taking a profit).

So you’d like to know what happened yesterday? Ok well, the International Monetary Fund (IMF) and Eurozone (EU) announced a whopping €750 billion bailout plan for Europe (for the record, that’s around $1 trillion folks!). Furthermore, the European Central Bank advised that it would commence purchases in the European bond markets.

So it would seem that Europe is acknowledging how dire the situation is, and have responded in a way that should be able to assist the more financially vulnerable markets over the next few years.

Before we get too excited (thinking maybe I’m the only one excited by all this), the package needs to be approved by the parliaments of the individual member states, and there’s a lot of detail to be worked out.

Of course, the really HUGE news of the night was that my beloved Blues gave the Saints a hiding (sorry dad) in last night’s AFL match. Ah, it really was a great night wasn’t it….?

On a side note, I can’t help wondering how Mr “Fat Fingers” is going right now? You know, the chap that allegedly placed a sell trade for $16 billion instead of $16 million…. Can’t even imagine how red his face was after that little (?) debacle. Tee hee.

Talk soon,

PS. I know most Australians will be glued to tonight’s Budget briefing, but if you’re unavoidably otherwise engaged (washing your hair?), stay tuned for my “Budget Breakdown”. I promise it will be concise, easy to understand, and relevant.

PPS. The Australian market closed 1% lower today, so the yo-yo fad continues.