leadership

Here comes the cavalry…

SmartCompany /

The future starts tomorrow, but it promises to be a time to hang on to your hat with both hands.

 

Colin Benjamin

As you prepare for the week, it’s time to hang on to your hats – because the first Tuesday in November could literally stop the nation in its tracks. The Government’s avalanche of advertising will most likely start. The price of oil will go through the roof, the sharemarket will catch fright and Aussie gold will be the week’s big winner.

 

First we will most likely see the mother of all fear campaigns around the decision of the RBA to raise home mortgage rates to around the levels of the last ALP government. The cavalry is in the mounting yards in the USA, with financial stocks about to dismount and only the high tech globals showing their form.

 

When Citibank and Merrill Lynch get the sniffles, even with massive overall profits, the nation catches a cold and the Asian markets are likely to have a feverous response.

 

The recent small adjustment of the US Fed will be seen as the forerunner of a massive sub-prime bond securities crash that will demand attention by financial institutions around the globe.

 

At the same time, we will see the impact of a massive set of deals for supply of commodities trading between China and Russia that will suggest that the new leadership is not just an Australian electoral slogan and is more a forerunner of a realignment of the world’s major supplier of cheap products and expensive commodities contracts.

 

Under these conditions, the Costello tsunami will be a critical message for the Howard-appointed RBA board members to consider holding off an interest rate rise until December.

 

That way it can be a BIG message to beware of a major collapse in the US sharemarket that could obviate the need to raise the rate to 7% until after a special pre-Christmas sitting for a Treasury conversion of the “me-too” flood of funds into Futures Fund dikes around the economy until the US situation stabilises.

 

So, hang on to your hats on Cup Day, and watch the weekend futures market and the local electoral betting market prices for an indication of the very real risk analysis that should shape market expectations for the first half of next year.

 

This is the Factor X that has been the turnaround of the poll leads in the previous Howard miracle recoveries, and should herald a cavalry charge of fear and calls to leave everything in secure hands.

 

To read more Colin Benjamin blogs, click here.

 

Comments

Penny Grandy at Jims Paving writes: Colin, I always read your blogs but this one has been written with extra whip cracking flair. Congratulations, it was a great read.

 

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