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Morning all,

Another exciting day in store with very little change on overseas markets..we wait for Ben but not sure that will sort anything out..expect disappointment…and you won’t be disappointed…the big story is the Iron Ore price struggling at $90 a tonne..conventional wisdom said that it was never going to get this low and many brokers still have much higher forecasts in mind…now the price has fallen 40% since May!!!Scary…I would not be looking at the resource trade anytime soon and feel that there is some more downside to come in BHP,RIO,FMG (Sorry Charlie, maybe Jim is right…) and AGO…it is going to get worse before it gets better..so the question is at what price will the Iron Ore price settle and when do you buy the bulk material stocks…I believe that we will see Iron Ore at low 80’s in the coming months..BHP will slip below 30, RIO below 47 and FMG will touch 3…this will knock the stuffing out of the ASX 200 which is looking toppy and cum div ,cum stimulus expectation and cum hope…I believe that it’s about to go ex everything and dribble back down…The Aussie dollar will also come under pressure as a result.

 

I had a look at the charts on the banks yesterday and its weird but three out of four banks are $25!!!I would suggest lightening the load in these for the time being…they have room to fall back a little..

 

The market has been trying the top of the range but looks like a pullback is needed…even Gold is pulling back due to the risk that Uncle Ben will do nothing..now with US GDP at 1.7% ,it’s not bad enough to pump in even more money and you have to say that all the can kicking has produced very little for the real economy ..it has inflated Wall Street no doubt but no volume..only the computers are getting richer..Joe Public left the market a long time ago!

  • With the US economy creeping along there does not seem an imperative for Uncle Ben to pump in more money..maybe more ZIRP…sounds like something out of Sesame Street..but it’s the Zero Interest Rate Policy…don’t you love Alphabetti Spaghetti…Zombies are great at making up new ones..ECB,ESM,ESFS,Etc….
  • Merkel: ‘believes  banking license for ESM not compatible with EU law, closer integration is vital to stabilising the Euro zone and the bloc has sufficient means to achieve that, convinced that Italian reforms will bear fruit’. Maybe sun dried tomatoes perhaps..or olives..

 

 

Things to make me go all Fe2O3..

 

1.Is it just me or do you get the felling we are heading into election mode…Julia is doing more backflips than the Olympic Gymnastic team, spending more money than ‘Big Nath’ on Houses in Maui and
generally pumping up the jam!

2.Chris Richardson from Access economics has suggested that both parties are promising to spend more money than they have…so nothing new here..issue for the Swan camp is the revenue from bulk commodities is taking a hit..goodbye Surplus my old friend, it’s time to be in deficit once again..it’s the sound of silence!!

3.Head of the world’s biggest shipping line believes the slowdown suggests more permanent challenges to China’s export sector.Waiting for Chinese PMI…Chinese Stock market pushing down on its post GFC lows!!

4.Newcrest Mining is reviewing the $4.8bn cost of developing its Golpu deposit in PNG because of the slump in global financial markets, and has delayed first production at the facility by one year to 2019..one broker has cut its target by 5 bucks!!Looks like a hold at best!!

5.MTS getting squeezed by the big boys in the grocery wars..latest earnings upgrades appear more like a downgrade to me…not going anywhere fast.

6.A 10% surge in the cost of insuring against the default of Rio Tinto’s debt over five years, amid a plunge in the iron ore price, is a sign that global credit traders are sharing the concerns of equity markets.

7.Paralympics begin with Stephen Hawking taking a starring role..

8. A major restructure and weak share market conditions have contributed to a 57 per cent profit fall for fund manager Perpetual. It made a net profit of $26.7 million in the year to June 30, down from $62 million the previous year.

9.Another sad day in Afghanistan if reports are true that another three Diggers have been killed in a ‘Green on Blue’ attack..that means when one of their own allies in the Afghan army turns on the Diggers!!Such a waste ..still not sure why we or the US is there!!

10.September is usually the worse month in the US markets with a pickup in October..now I know the 87 crash happened in October and there have been mini crashes since but September is worse..I would be moving more to cash at the moment!

11.VIX is creeping back up ..now 17 after hitting low 14’s….risk is back…

12.Hurricane Romney misses New Orleans and heads straight into Tampa…game on Obama! Oil weakens as a result..talked on TV this morning about the oil price..if its 95 bucks in bleak times what could it go to if the good time roll…

Below is a chart of the Iron Ore Price…not a good look!

 

Watch Out Below!!!!

And finally the answer…

Dear Desperate
First, keep in mind that Boyfriend 5.0 is an entertainment package, while Husband 2.0 is an operating system.
Install Tears 6.2 and enter the command C:\ I THOUGHT YOU LOVED ME.
Husband 2.0 should then automatically run the applications Guilty 3.0 and Flowers 7.0.
But remember, overuse can cause Husband 2.0 to default to Grumpy Silence 2.5, Happy Hour 7.0, or Beer 6.1.

Beer 6.1 is a very bad program that will create Snoring Loudly.WAV files.
DO NOT install Mother-in-law 1.0 or reinstall another Boyfriend program.
These are not supported applications and will crash Husband 2.0.
In summary, Husband 2.0 is a great program, but it does have a limited memory and cannot learn new applications quickly. You might consider buying additional software to improve performance. Or Revert to Boyfriend 6.1!!!

Have a good day

Clarence

xxx

Any financial product advice contained in this email is general financial product advice only and does not take into account any one person’s objectives, financial situation or needs. Therefore, before acting on any financial product advice in this email, you should consider, with or without the assistance of an independent adviser, the appropriateness of the advice, having regard to your objectives, financial situation and needs.

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