Good morning,

Markets are due to pause and ease back as the Greeks appear to be reluctant to hand over their country to the Germans. The deal on Greek debt is edging closer but there seems to be some serious stumbling blocks and if they cannot be overcome we will fall into the abyss…’Teacozy’ seems to think that we are no longer on the edge of the abyss but have pulled back by his adroit management together with ‘Moaning Mertle’…I am not sure what the Greeks are so worried about anyway after all they won Euro 2004 with a German manager! Might be a good thing..

Anyway the economic numbers out of the US were disappointing and feel we may have got ahead of ourselves a little..all this optimism about the New Year is maybe a little too much and we will fall back..I was targeting got there and now expect a little backing and filling..risk is that we drift down..US GDP came in at 2.8% a little worse than the weather forecasters were expecting at 3%..also news out of China this morning that they are not in quite such a hurry to ease monetary policy, will also be a dampener…expect our market to give up Fridays gains as we await the Greek resolution..they have a choice the German Fat Controller or default and freedom !!!Gonna be a close call..

Anyway as Uncle Ben pops out to the shops for some new ink, the sneaky Gold price is looking very hot! It has quietly rallied from 1600 to around 1740 which is not too shabby..focus will be on Golds with NCM still good for a few more cents to the upside..I also like SLR but at 3.66 may have run a bit far…

Earnings season start soon so we will get to see how the economy is faring from the coal face….WPL stirred the waters on Friday with a leak (sorry pardon the pun) then denial that it was looking to sell some of its Browse Basin exposure..good to put a value on it and draw attention to it..interestingly Exxon has just sold its stake in a Japanese refiner for $4bn ,so has a bit of change in its pockets for the odd deal..I am a fan of WPL under the new man and he seems to be more pragmatic and not so sacred about the company..been a dog in 2011 maybe 2012 will bring better times..Accumulate WPL around 33.50 for a medium term view..

Commodities continue to push up ..Facebook worth $100bn(I know how does that make sense!!!) …research on RIO/BHP and WPL enclosed…

Scary Thought for the day – Spanish Youth unemployment is 52%  In Greece it is 47% and Portugal 31%..the risk is not in a banking crisis, it is in the countries actually facing a lot of young people who want to change things..what have they got to lose..more is the winter of potential discontent!!!

Economic Events this week

Tuesday RP House Data prices-NAB Business Confidence

Wednesday ABS House Prices

Thursday Trade Balance and Building approvals

Then next week we have the RBA meeting so expect another rate cut!!

Back on Sky again this afternoon!!


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