Market Today

Today's market outlook comes early (cos I'll going out for my Friday nite party!)
Anyway, here's the juice for your post-dinner digestion (or indigestion):

In London, the FTSE 100 index of leading shares closed 8 points lower, at 6,440, yesterday. Now at 6,490, it has regained some 50 points.On the Continent, the Paris CAC-40 is currently at 5,906, up 77 points from yesterday. Frankfurt's DAX-30 was lifted to 7,338, intraday. Not bad for a day's job.
Across the Atlantic, stocks closed mixed as the pharmaceutical and biotech sectors made gains whilst oil majors and metals miners fell. The Dow Jones industrial index recovered from a morning slump to achieve a new record closing high of 12,808, a 4-point gain. The Nasdaq lost 5 points, ending the day at 2,505. And the S&P 500 lost one point to close at 1,470.
In Asia, buyers cautiously returned to the Nikkei following yesterday's losses, helping the Tokyo index to a close of 17,452, an 80-point gain. In Hong Kong, the Hang Seng added 234 points to close at 20,534. STI picked up another 69 points to close at 3,360, just 40 points down from yesterday. KLSE, the only laggard of the day, seems to be the only counter that might end the day in the negative saw itself jump right back on track to 1,315, up just 9 points from yesterday's close. So no red today in Asia.
Crude oil was 52 cents higher at $62.35 this morning, and Brent spot had edged up to $65.79 in London.
Spot gold lurched between an 11-month high of $691.50 and a low of $678.70 yesterday, and was trading at $684.70 this morning. Silver had climbed to $13.73.

So what's going on?

A shiver went through global stock markets briefly yesterday as China’s economic growth once again stormed in ahead of expectations, at 11.1% in the first quarter, leading premier Wen Jiabao to announce plans for a further crackdown on lending.
The Shanghai Shenzhen index fell 4.5%. Mr Wen felt that loan growth is too fast. Fact is: Inflation is now at 3.3%, the fastest rate in two years, and money is still being piled into building industrial infrastructure that no one really needs. Meanwhile, millions of Chinese are opening trading accounts & diving into the stock market, as a rampant case of genuine casino capitalism overtakes the populace.
You don’t have to belong to the Austrian School of Economics to know that this mad levels of investment, especially when orchestrated by commissars for political purposes, invariably end badly.
Part of the problem is that the Chinese currency, the yuan, remains artificially cheap. All the money flowing into the country is fuelling the boom. Some felt that the regime should “bite the bullet now” on yuan revaluation. Of course this would lead to carnage in the countryside as farmers would go bankrupt in the face of cheap grain imports.
This is probably the reason that the chinese government is trying to find other ways to slow the damaging growth in its investment bubble, such as tightening lending requirements. But if you keep trying to put off the tough choices until tomorrow, the problem you‘re attempting to escape just gets larger and larger, Mr Wen.
Of course, you have a choice, Mr Wen. Other countries don’t even have the option of setting their own rates.

So, how is your stomach now?

Until Monday, have a great weekend.
And remember: Don't do what I Won't Do.

Maths is Everything

A husband wrote the following letter for his wife and left it on the dining room table:

To My Dear Wife,
You will surely understand that I have certain needs that you, being 54 years old, can no longer satisfy. I am very happy with you and I value you as a good wife. Therefore, after reading this letter, I hope that you will not wrongly interpret the fact that I will be spending the evening with my 18 year old secretary at the Comfort Inn Hotel.
Please don't be upset - I shall be home before midnight.

When the man came home late that night, he found the following letter on the dining room table:

My Dear Husband,
I received your letter and thank you for your honesty about my being 54 years old. I would like to take this opportunity to remind you that you are also 54 years old. As you know, I am a math teacher at our local college. I would like to inform you that while you read this, I will be at the Hotel Fiesta with Michael, one of my students, who is also the assistant tennis coach. He is young, virile, and like your secretary, is 18 years old. As a successful businessman who has an excellent knowledge of math, you will understand that we are in the same situation, although with one small difference: 18 goes into 54 a lot more times than 54 goes into 18!!!
Therefore, I will not be home until sometime tomorrow.

A Blonde is a blonde is a blonde...

A gorgeous young redhead goes into the doctor's office and said that her body hurt's wherever she touches it.
"Impossible!" says the doctor. "Show me what you mean?"
The redhead took her finger, pushed on her left breast and screamed, then she pushed her elbow and screamed even more! She pushed her knee and screamed again; likewise she pushed her ankle and screamed.
Everywhere she touched made her scream!
The doctor said, "You're not really a redhead, are you?
"Well, 'err, no" she said, "I'm actually a blonde."
"I thought as much!" The doctor said ...
"That's a broken finger!!!"

Learn the 5 Langauge of Apology Part V

Learn the fifth language: Requesting forgiveness.
This says, “Will you please forgive me?”
When you speak this language, you show the offended person that you want to see the relationship fully restored. Let the person know that you realize you’ve done something wrong, and that you’re willing to put the future of the relationship in his or her hands, since the relationship depends on that person’s choice to either forgive or not forgive.
But never demand forgiveness; understand that it’s a gift that must be given freely.
Don’t expect the person you’ve offended to forgive you immediately, because forgiveness can be costly and take some time.
Ask God to help you be patient as you wait.

Adapted from:
The Five Languages of Apology: How to Experience Healing in All Your Relationships
by Gary Chapman and Jennifer Thomas, 2006

Rules for Success from a Cab Driver

(Below was an account about a motivating taxi driver in Houston, Texas - by Zig Ziglar)

One morning in Houston, Texas, I caught a taxi (to go to a breakfast meeting) and during a short ride I heard one of the finest sales talks on America and free enterprise that I ever heard.
The cab driver had been a professional health care provider in his native Nigeria, but he preferred living in a free society, with the opportunity to do what he pleased, and so he was very excited about being a cab driver in Houston.
During our conversation my immigrant friend quickly turned to motivator and his enthusiasm led him to give me some rules for success! I offer them here so that you might benefit from them, too.

1. Pay your bills.
2. Obey the laws.
3. Keep your eyes on God. God is in charge.
4. Run from lazy, crooked people.
5. Make your workplace your home.
6. Love and honor your boss.
7. Keep your promises.
8. Mind your own business.

I was motivated by the cab driver who was excited about his dream and having the opportunity to live it. He had set his goal long ago. He was living his dream. He wasn't waiting until he could get into something better; he was performing with the opportunity he had. He was happy with what he had and was enthusiastically giving life his best shot. That, my friend, is marvelous preparation for a better tomorrow!

The Truth about Truth

"Sincerity is not a test of truth.
We must not make this mistake: He must be right; he's so sincere.
Because, it is possible to be sincerely wrong.
We can only judge truth by truth and sincerity by sincerity."

"There is nothing wrong with affirmations,
provided what you are affirming is the truth.
If you are broke, for example, the best thing to affirm is, 'I'm broke!'"

"Very few of us are authorities on the truth.
About the closest that any of us can get is what we hope is the truth or what we think is the truth.
That's why the best approach to truth is probably to say, 'It seems to me...'"
- Jim Rohn

No Fish Prawn also Can

For all my lonely female friends out there:

"Boh Hur Hay Mah Hoe"!

I am not sure whether is this a Japanese or Korean product.

But I know it's out there.

Advantage: He can't talk back to you.

Disadvantage: He can't talk back to you.

Hang on to GOLD, and Why.

Don't say it too loudly, but gold investment in 2007 is starting to look like a buy of the century. Many analysts note that institutions have a “growing love affair with gold”. Expects gold to rise as the US dollar falls further this year. But “now that everyone expects [gold] funds to continue powering ahead, expect a downturn”, warns one fund manager. There’s too much “hot money” in the metal, says another. Could they be right? Take a look at the year ahead and you’ll find it isn’t likely: there are very good reasons to buy and hold gold investments in 2007 and onwards.

Demand from India is likely to grow
India leads the world in its love of physical gold. Gold already has “the highest penetration of any other financial product”, says a head of Kotak Mahindra Bank. Private individuals in India own more than 14,000 tonnes of gold necklaces, rings and bracelets – nearly 10% of the world’s above-ground gold stocks, and more than the US, German and French governments put together.
Gold will remains an integral part of Indian culture. As households earning above $80,000 per year set to treble next decade, it seems gold ownership will keep growing – especially considering that, on a per-capita basis, India still lags more developed markets. Per head, Turkey’s jewellery sales in 2006 were six times greater than India’s in volume terms.

Economics 101: mining output fell in 2006
Increased gold mining output would cap any rise in gold prices and basic economics says mining output should now be rising in response to six years of higher prices. Yet gold mining supply fell 2% last year. Gold output slipped 1.5% from 2005. Problems of cost, politics and finance are capping how fast gold mining firms can dig gold ore out of the ground. The “easy gold” in safe regions has already been mined. North American output this year is forecast at just 78% of 2002 levels.
South African output has halved since 1998. Ore grades in both countries are falling fast too, while less stable regions have yet to pick up the pace.
Then there’s cost. In the five years to November, Newmont Mining average production costs rose by two-thirds per ounce. Some forecasts that Newmont’s combined output with Barrick Gold, the world’s largest gold miner, will be 40 or 50 tonnes less than expected in 2007.
Also, as gold miners extract their ore, the value of their balance-sheet assets falls. Replacing gold-in-the-ground with new discoveries is harder than ever. Between 1985 and 2003, new gold ounce discoveries slipped by 30% from the previous 15 years. Each new ounce discovered also cost 2.6 times as much to locate. Large deposits (judged at 2.5 million ounces or more) aren’t enough to replace the major gold miners’ current rate of production. Between 1992 and 2005, world output totalled 1.1 billion ounces. New large reserves were barely half that size.

Risk of government seizures
Gold miners also face populist governments stealing their assets. The government in Fiji last week seized the Vatukoula mine belonging to Australia’s DRDGold. Last year, the Russian environmental agency revoked two mining licenses owned by a London-listed gold producer.
Environmentalism is another issue. The Gabriel Resources’ project at Rosia Montana in Romania may hold the largest undeveloped gold reserves in Europe, but upturning 5 mountains to get at 450 tonnes of gold doesn’t fit with today’s green politics.

De-hedging and prices
By June 2001, the global gold-mining industry had sold forward a massive 3,421 tonnes of production (well over 135% of an entire year’s output) onto the futures market. That “hedging” made short-term sense during gold’s 20-year bear market (from 1980 to 2000). It funded production and locked-in fixed prices for future output. But it also helped drive prices lower. Now that gold has trebled against the US dollar, miners are desperate to buy back their forward sales.
Between April and June last year, gold miners de-hedged 158 tonnes. That helped drive the gold price up to its huge spike above $720 per ounce in mid-May 2006. “The rate of de-hedging was bound to slow afterwards,” says a head of precious metals research at Mitsui.
But data for June to September shows “global mining companies remain committed to reducing their hedge commitments and have very little appetite for new hedging”.
Falling sales by Western governments should also support the gold price. European central banks sold only 396 tonnes of gold last year, against an agreed limit of 500 tonnes. But emerging economy governments are buying gold for their currency reserves. The details are secret, but analysts guess Russia bought 8.7 tonnes of gold between August and October, while Middle Eastern banks may have bought 100 tonnes in 2006. No price for guessing how much China is committing. They are not telling anyway.

The real reason you should buy gold
Why would anyone buy gold in the first place? The metal has few industrial applications. New compounds are replacing it in dentistry, and it will never pay a dividend. Gold costs to own, in storage and insurance fees. Add a minimum 2% surcharge from the gold dealers, or a dealing spread plus stockbroking charges should you trade gold ETFs, and gold soon looks like a losing trade, unless the price rises in terms of your local currency. And that’s where its potential lies today.
Gold can’t be made at will, no matter how pricey it gets. This is why it’s been used as a store of value for 5,000 years or more. Gold’s attraction is that it is rare: an attribute of money that no longer holds true for dollars, pounds, euros or yen. Gold is a “global currency", the only one that is freely tradeable and unencumbered by vast quantities of sovereign debt and prior obligations. Royal Bank of Canada now trades gold off its currency desks, rather than viewing it as a commodity.

If you look at the flood of paper assets in global financial markets, you can see why. India’s money supply has surged more than 200 times since 1975, helping to knock the value of the rupee down from eight per US dollar to 48 per dollar. In Britain, the broad money supply is rising at 14% per year, faster than at any time since 1991. But the supply of stockmarket securities, bonds and complex derivative products is rising faster still. “Financial innovation in the last few years has been extremely strong,” says a head of asset management at BNP Paribas. Financial innovation is now so rampant, in fact, that derivatives weigh in at $340trn altogether, more than eight times the value of all goods and services traded in the real global economy last year.

Today’s bubble in novelty and complexity is sure to blow up – if not in 2007, then all in good time. Holding gold acts as insurance. The “barbarous relic”, as it was dubbed by John Maynard Keynes – so beloved of apparently naive investors in the booming economies of India, China and the Middle East – is the ultimate antidote to “financial innovation”. Nobody’s promise, gold is also no one’s to create. And while you’re waiting for the mountain of debt and derivatives to explode, you can own a secure physical asset that’s likely to keep rising in value, thanks to the rules of supply and demand.

Market Today

Market all around the world found red today after China announced possible tightening measures with stronger than expected GDP figures.
Starting with UK, London shares stayed in the red yesterday as weakness in the mining sector persisted. The blue-chip FTSE 100 closed 48 points lower, at 6,449, and the broader indices were also weaker (with the exception of the FTSE Small Caps). Miners BHP Billiton and Vedanta were amongst the day's biggest fallers, whilst defensive play Associated British Foods topped the risers.
On the Continent, the Paris CAC-40 closed down 22 points at 5,835 as investors took profits, whilst the Frankfurt DAX-30 was down 66 points, at 7,282.
Across the Atlantic, the Dow Jones closed at a new record high of 12,803 - a 30-point gain - as JP Morgan Chase and Intel reported positive earnings. The S&P 500 rose 1 point to end the day at 1,472. However, Yahoo dragged the tech-heavy Nasdaq down to a close of 2,510, a 6-point fall.
In Asia, a stronger yen hit exporters and saw the Nikkei 225 index plunge 295 points lower to a close of 17,372 today. In Hong Kong, the Hang Seng closed 479 points lower, at 20,308. STI also see red as it give up 109 points to close at 3,291. Malaysia ended 22 points down at 1306, while the Korean counters drop 20.0 to 1,513. Taiwan also ended in the negative at 7,888 after surrendering 114.7 points.
More importantly, the Shanghai Composite shed 163 points to end at 3,449 (4.52% down). It is the biggest drop in Asia for the day, considering the second biggest loser, the STI, at 3,2% down.
Crude oil had fallen to $62.74 this morning, and Brent spot was down to $65.40.
However not all is bad news. Spot gold rose as high as $691.50 in Asia trading, but found trading in a range between $682 to $689 now. Silver, however, fell to $13.73.
Until tomorrow, be good, or else, be careful!
I thought I warned you already about our old friend yesterday, but you were sleeping at 3:30am (just like right now!!!).