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Morning all,

Zombieland was again the focus last night with Spain in the spotlight as bailout thoughts bubbled to the surface..September is shaping up as a crucial month for our walking dead…We have Dutch elections, German court decisions, Greek reports,G20 meeting and Spanish auditors reporting ..all this whilst China continues to slow ,the Iron Ore price tanks and the US muddles along. All up I believe and have for some weeks that the markets is overstretched and has detached a little from the reality of risk!!I have been saying that it is a good time to lighten the load after the big move we have had..I remain of that view…the feel good factor of the Olympics is slowing evaporating as the holidays in the Northern Hemisphere come to an end and they face a bleak winter! I wrote yesterday that September was a dodgy month market wise and expect it to be this year…caution is my watch word at the moment.

Yesterday all the talk was IRON ORE pricing..$88.70..lowest since October 2009..now with the moves we have seen down in recent weeks it is surprising that the AUSIE Dollar has held up..I do not expect it to last…once the yield hungry Overseas players have their dividends in their pockets it may be exit stage left pursued by a bear!

I was on TV yesterday morning at 06.30..and we all know what O stands for ..O My God its early! thanks Robin…anyway I was talking about a bottoming of the Iron Ore price in the next month or so with a price around low 80’s…that’s my call anyway but it may be a long road back to the heady days of $110!!!i remember when the commentators said it was unthinkable that Iron Ore would sink below that..well sorry guys but it has further to fall as does the Aussie! The falls in our major commodities will have serious ramifications for the economy and will bring on a move to a more one speed economy..trouble is that speed will be stationary!!Swan will have to do some rejigging at this rate…

In news yesterday, BLY was taken out the back and executed for saying that the mining boom had peaked and their profits were unlikely to stay at record levels but would  slip back to 2011 levels…honesty is obviously not the best policy if you  are a mining services CEO…memo to self do what Juncker does..Lie!!I think that the move down in BLY was overdone and complete knee jerk reaction from the computers..BUT credibility will  be hard to gather and any bounce may be limited..

Meanwhile in Jackson Hole everything is ready and waiting for Uncle Ben to deliver a damp squib…even Super Mario and Auntie Christine have pulled the pin on the invite and are staying at home..maybe they cannot afford the ticket price! Expect nothing and you will not be disappointed…just more rhetoric from all the Pollies..think they are struggling for answers…

As we approach the end of the month and the end of Winter here Downunder for all my international readers, I would still recommend taking the top off your bank holdings as the market could pull back to the 4200 level in the next few weeks

Things to make me go all Ole!

1.Spain will delay deciding whether to seek a sovereign bailout until the aid conditions are clear, Prime Minister Mariano Rajoy said following a meeting with French President Francois Hollande.”

 

2.Bloomberg reported that Spain is considering recapitalizing its fourth largest lender Bankia without resorting to EU bailout money. “If confirmed, this could increase the risk that Spain will repeat Ireland’s past mistakes.

 

3. Zombiezone economic confidence fell by a much larger than expected 1.8 points in August to 86.1. This is the lowest reading since August 2009. The consensus was for a print of 87.5.

 

4.Fortescue Metals Group will divest non-core assets, pre-sell iron ore to customers, defer non-essential spending and raise further debt if necessary to avoid an equity raising to fund its $US9bn expansion

 

5.As energy companies consider the next $100 billion of projects, a switch to East Africa would hold back Australia’s market share in China and India, where energy consumption is forecast rise more than 60 percent by 2030.

6. Obama spokesman: no announcement on using petroleum reserve, White House “studying our options” on oil prices…feeling that they will release reserves to get the price down..mini stimulus package!!

7. Metcash chief executive Andrew Reitzer has defended Metcash’s acquisition of a 75% stake in automotive parts and accessories wholesaler Automotive Brands Group in response to criticism from shareholders at yesterday’s annual meeting..IMO dumb to buy into some of the businesses they have in the last few years..Mitre 10 and Auto parts…good one..

8.Best news of the day is the truly dreadful ‘The Shire’ has been canned..or should I say toxed! Another Channel Ten winner..these guys are pretty terrible at reading what the public want..more Masterchef repeats and all stars finals etc to come perhaps!!!

9.Prince Harry has put Vegas pool parties back on the map…maybe he should work for Vegas tourist board…really helped when Lara did it for the Australian one..where the bloody hell are you Harry!

10.FMG head Nev Power remains optimistic..well he would ..he probably just saw what happened to BLY when they were honest..Chanos will be champing at the bit to keep shorting FMG..he may be on to something this time out..didn’t get Macquarie right.

And finally a truly sad day for the families of five brave Australian soldiers…lest we forget the sacrifices they made for their country..so sad to lose such fine young men especially to the very people they are supposed to be helping and training….such a huge waste and so sad..my thoughts and condolences are with the families.

Have a great weekend and Happy Fathers day!

 

Clarence

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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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