Good morning,

Overnight the woes of Europe resurfaced with gusto as election fever grips the zone. The Dutch PM has resigned forcing a fresh election, ’Teacozy’ could be looking at being a home husband(not bad if Carla was at home too) and the Greek elections just add to the mix. All these events have the potential to unravel the austerity drives that the Germans, sorry Euro Troika, are enforcing on the rest of their partners in the great Euro debacle!

Economic news also wasn’t too flash with Euro zone looking like its slipping into a recession, China continuing to slow a little. Today we get the inflation numbers which are a joke anyway as we all know that the price of stuff is not rising by 2 or 3% but far more(just look at your utility bills)…I mean $18 for two pints of beer at Customs House in Sydney..And they don’t even have premises just a park to drink in!!!And they say London and New York is expensive!!Really! However the number today will confirm that the RBA has completely stuffed it up yet again and misjudged the strength of the economy and will have to cut rates..The currency is telling us that and expect parity in the not too distant future.

Our market will lose 30 odd points yesterday in another lacklustre performance..the volumes are so low (yesterday was slightly above $2Bn,pathetic) that even the computers are struggling to make money..if it goes on like this for much longer they will have to stop sending their little chips to the private Intel school.

I hope everyone has locked in their holiday rates to the US because it will go below parity..

I have been saying that the next three to six months will get trickier from here .I firmly believe that as the weather warms up in Europe so will the cauldron of social discontent. The austerity measures offer some countries no hope and when people have no hope they have nothing to lose..Freedom is just another word for nothing left to lose…ask Bobby McGee.

Stock wise I still love TLS for yield and safety(report enclosed)..also continue to look at LNC and AMX ..expect small pullbacks in line with market…BUT remember the range is 4200-4370….and where we are now means the risk/reward equation favours the bears!!Have some cash and  use any strength to lighten positions..it could be a long winter of discontent..made glorious summer by the woes of Europe.

Things that caught my eye.

1.NCM downgrade-Will not be pretty…Our largest Gold stock is going to take it today…not good news..Lihir is underinvested and Cadia is having weather issues..Expect the stock to head towards the 25 buck level..may go lower!

2.Cost overruns at ORG’s Bass Gas Mid Life enhancement project…Mid Life Enhancement ..I want one of those..

3.Facebook profit down as they head into the IPO… Net income slid 12 per cent to $US205 million in the quarter, from $US233 million a year earlier ….so it has revenue of 1bn and value of 100bn..you reckon!!900 m subscribers cant be wrong.
4.Bundesbank chief opens his mouth with these wise words. “Monetary policy is not a panacea and central bank firepower is not unlimited, especially not in a monetary union,” he said. “We can only win back confidence if we bring down excessive deficits and boost competitiveness. And it is precisely because these things are unpopular that makes it so tempting for politicians to rely instead on monetary accommodation.”

5. The Q1 final Producer Price Index (PPI) falling -.3% vs. expectations of a +.4% rise confirms that inflationary pressures in NW Western Australia are nowhere to be seen in the rest of Australia, which is why the RBA is “reassessing” its inflation forecasts.

6.The Slipper affair looks worse and worse for Gillard…maybe another election to add to the political uncertainty..at least we may get Pokie reform!

7.Matthew Newton arrested again…starting to be more regular than a Greek bailout!

8.Wal Mart slides on woes South of the Border down Mexico way.

Company news today

  Wesfarmers Q3 sales results

  Kagara 3Q output

  Newcrest Mining 3Q output

  Oil Search 1Q output

  Whitehaven Coal March quarter output

  Beach Energy 3Q output

  The following companies hold general meetings: Pryme Energy, QXQ, Buccaneer Energy, GTI Resources, Jaguar Minerals, Millennium Minerals, MOD Resources

 

Anzac day tomorrow…Lest we forget

Clarence

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