asx monday predictions, page-30

OK - My attempt at some rational thoughts in an irrational world

1. Banking sector in Aus. Provisioning for bad debt and slow down in credit growth happened in the GFC. Lending practices were paired back. Property prices fell. Commercial yeilds pulled back. Banks remain solvent and very profitable in very tough conditions. They have now been sold to PE's below 10

2. Mining Sector. - Still fueling the Asian expansion. RIO sees growth in China holding 9.5% this year and above 8 next year. India is waking up. Again profits are strong. A drop in the Aussie dollar will assist exporters

3. Retail and tourism - Pretty well been stuffed for some tyime. Aussie dollar, floods, cyclones.


4. Debt to GDP - We have the lowest debt to GDP of any of the Usuual growd. Huge capacity to support and stimulate the economy in need.

5. SP Performance - We have underperformed the Asian and US markets , probably due to the Aussie dollar, and the uncertainty about the Carbon tax and Super Profits tax. The government has done its best to kick only performing Aussie sector in the guts and it is still growing

6. Personal savings - Since the GFC Aussies have prefered to save cash and reduce debt. This combined with low unemployment will assist us through any tough times
Summary

A massive selloff in the Aussie market is unwarranted. It may happen, but solid stocks in the ASX will become so cheap on a PE basis that the accumulators will act. We need to focus more on Asia and our place within it. It will drive the outcomes we need to get through.

So buggered if I know what will happen tomorrow

Probably a morning sell followed by some bargain hunting ??