Morning all,

Last week ended on a fizzle as some profit taking crept into things. After a great start we succumbed to doubts again and staggered to the close. I suspect that we will try to push ahead this week as we approach the German Court decision on the Constitutionality of the Zombie Bailout. However the way ahead seems clearer now,(See No 12 Below) the whatever it takes rally is being backed by Super Mario to an extent we have not seen previously. This coupled with Uncle Ben’s QEIII and the start of some Chinese stimulus makes me think we have some more upside to go. On Friday news filtered out from behind the Great Wall that the Chinese Government was going to build more roads, subways and other assorted infrastructure. This was good news indeed and helped the Shanghai market move higher for the first time for a while….so with every Central Bank around the World pumping money into the system it was hardly surprising that the Gold price launched itself. Up to 1735 and ‘looking good Billy Ray. Feeling Good Louie!’(Trading Places).

So with the Gold price galloping ahead, its going to be a good time for Aussie Gold shares which have been long undervalued…some of my favourites include BDR,SBM,EVN,SLR and IGR…..if you want to buy SLR a cheaper way in is through the takeover of IGR …6.28 shares in IGR is one SLR..usually about a ten cent discount.So Gold will be a bright spot especially if the Aussie Dollar slips below parity which it will…

Last week all eyes were on the Iron Ore price and what its fall will mean for FMG and others plus how it will kill Mr Swann’s budget faster than you can say ‘There’s a darkness on the edge of town”! I wrote on my blog on Friday a little piece on FMG and what it means for them so check out www.beeksdownunder.com if you want to read it. And sign up for updates along the way..

Expect a positive day for our market with resource stocks leading the way..Iron Ore has bounced a little so have other metals so that’s where the action will be..financials and defensives will lag a little but still likely to feel the warm glow!

Things to make me go all Coldplay closing ceremony!

1.Hu tells APEC that they will act on falling demand..Hu?No Hu!Hu?What’s on first?Hu’s on second…etc

2.Myers look like its in for a rocky ride this week..The under-performing Myer department store chain is expected to report a fall in annual profit of as much as 15 per cent.In May, Myer warned that tough trading conditions could lead to a further fall in profit, after initially expecting its profits for the year to July 30 to fall by 10 per cent.

3.Paralympics winds up…inspiring stuff…and didn’t the Ukraine do well!!

4.Yet another reason to buy TLS, it will pocket hundreds of millions of dollars in coming years from its landline customers calling mobiles because it is not passing on regulated wholesale price cuts according to the Sydney Mining Herald.

5.Iphone 5 likely to be announced..excited or what!!!…it’s a phone people not the Messiah!Although for some ,Steve Jobs was a messiah!

6.In more ‘Zombieland’commentary from www.zerohedge.com At the same time, the two intended beneficiaries of the Draghi plan — Spain and Italy — expressed reluctance to ask the bank for help, even if both might eventually have little choice but to seek aid. The governments in Madrid and Rome apparently fear the political impact at home of bowing to whatever demands for harsh economic policy changes might come with the aid.

7.Looks more and more likely that Channel Nine is going to end up in the hands of Hedge funds and distressed debt buyers as Goldmans joins the party.

8.Australian Property market is showing signs of life..Bondi going gangbusters at the weekend.

9.Spot Iron Ore bounces 2 bucks on Chinese Infrastructure spend…Twiggy will be happy as will the Rinehart Cowboy!I heard someone on the radio call her that on Friday!!Maybe I have started something!

10.Soft US jobs numbers make it harder for Obama but good news for the QEIII bugs ..bring it on Uncle Ben..Bad is good and good is bad..Dow at 13,300!!!Our Market at 4300….something is wrong here…VIX fell 8%..Bears may get more punishment across the Globe.

11.LYC-Opponents of a rare earth refinery in Malaysia are refusing to back down after authorities last week gave the Australian company behind the project, Lynas Corp, the approval to proceed.

12.Germany’s government threw its support behind the ECB’s plan to intervene in bond markets, countering a deluge of domestic criticism. The European Central Bank, acknowledging that Europe’s debt crisis has reached a critical stage, said it was prepared to use its most powerful tool—its printing press—to save the euro.

 

And finally …have you ever noticed that when you do spell check with Obama in it ,it always wants to change it to Osama!

 

Have a good Monday

Clarence

xxx

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