Since October 2009 our market has trended sideways. There have been some corrections and some rallies but in the end we are more or less exactly at the same level on the All Ords index now as we were at the end of September 2009. They say that bull markets climb a wall of worry. Well, this bull market isn’t climbing anything!
The Budget handed down by the Treasurer Wayne Swan on Tuesday night didn’t really offer much in the way of financial services in either a positive or negative manner.
Having scoured many offerings available outlining the details of this year’s Budget and searching for content that might affect our clients, this SIRA Views will be a brief report and we trust you will find some benefit in the following outline of the key issues relating financial services.
The recent decline in the share market is a correction rather than the beginning of a new bear market! Why do we believe this?
In 1933, the US Federal Reserve Bank began massive ‘open market operations’. It bought $2 billion of government bonds, and flooded the system with liquidity. $2 billion in 1933 was a massive amount. It’s about $35 billion in today’s money, but of course, the ‘real’ (inflation-adjusted) economy was much smaller then.