Morning all,

I woke this morning to the headlines that the Dow had slumped overnight…well whoever writes these things is taking a bit of a liberty..20 points..hardly a slump ..still news over the Franco-German disagreement on who started it continue to affect the bulls…German business sentiment continues to fall and US numbers aren’t much better. There is no doubt that the World is slowing down…growth is slowing in all major economic blocks, whilst in the US the Dow is at 4 or 5 year highs…feel like there is a disconnect at the moment between Wall Street and Main Street. Now conventional wisdom has it that the stock market anticipates the outlook 18 months out..in which case we should see the economies starting to recover any time soon..but Equity markets seem to be driven by low global interest rates and risk appetite..Here we are at 4400 and the jury is yet to pronounce its verdict ..I had hoped that the trend was up but at best it  looks like consolidating after recent moves..At worse we may see some more weakness.

With rates so low and likely to remain that way and here downunder to fall as RBA cuts, the yield stocks will still be a good place to be and if you are optimistic on the Global outlook resource stocks will be ok..but don’t expect a stellar run just yet..whilst Zombies fight its unlikely to push ahead..we have had a lot of good news and we are now in consolidation mode…

And from Christine “La (rear)garde’!

The head of the International Monetary Fund, Christine La(rear)garde, called Monday for urgent action from policy makers in Europe and the United States to brake a slowing global economy.

“My main message today” is “the urgent need to implement the policy actions required to secure the global recovery,” Lagarde said in a speech at a Washington think tank.

The global economy “is still fraught with uncertainty” after the US-centered 2008-2009 financial crisis ushered in recession.

Or to paraphrase show some leadership guys!!

 

Idea of the day:

Intrepid Mines (IAU) After last week’s 72 % rise we had the pullback yesterday..I would be a buyer around 42 for a move back up to the mid 50’s in the short term…this stocks has 24 c in cash and a new best friend to help them sort out the mess they are in with their joint venture partner in Java..He has a lot of reasons to sort it out with options at 1.00 and 1.25..plus lots of stock at mid 20’s…buy on the pullback ..stop loss..38…

Things to make me go all Emmy!

1.Iron ore slipped for the fourth day last night to $103.70, so expect some weakness to continue in resource stocks..Golds may also come off the boil but with all the presses firing up around the world this commodity will go higher so any major weakness may be a buying opportunity.

2.Differences between Germany (and allies) on one side, and France (and allies) on the other, on certain aspects of banking union are becoming increasingly obvious(wasn’t it ever so). The latest disagreement is
over whether all or only systemically important or cross-border banks should be supervised by the ECB.

3.The booming LNG sector says a proposal to cut its tax breaks would make Australia’s tax regime for LNG the most uncompetitive in the world, threatening billions of dollars in investment and thousands of jobs

4.Treasurer Wayne Swan is under pressure to deliver his promised budget surplus by slashing industry assistance, middle class welfare and superannuation benefits for the wealthy because of a large drop in forecast revenue from the end of the commodity price boom.

5.China’s economy hasn’t shown any signs of rebounding in the third quarter, and domestic investment is unlikely to expand dramatically in the short term, a central bank adviser said….Have to wait for the change in leadership I think!

6.Faceplant plunges again, down 9%, as influential report on overvaluation…they will struggle to make money from smartphones…that is the issue for these guys. And the kids are moving on already..heard of snapchat?..you will!!!

7.Apple retreat a smidge..I think this has got more downside than upside at the moment and that will affect US sentiment…latest operating system is a mess and needs fixing…check out the forums and the blogs if you don’t believe me..I think they have rushed this upgrade due to Samsung pulling ahead of them..too soon guys..good article in Herald yesterday on the Apple peak..great minds think alike..

8.Worryingly fake gold bars turning up in Manhattan…Gold bars filled with Tungsten..more being found every day….

9.’Modern Family’ and ‘Homeland’ clean up at the Emmys.

10.Big Nath will face a critical test in the final months of 2012, as he deals with legal action by Mirvac. Reports also suggest after his failed takeover attempt for the company he may make a proxy battle for control of the Whitehaven board and management team.

11.Apparently Grey retirees committing welfare fraud are hoarding money especially 100 dollar notes…well I never..no wonder they cannot sleep with all those notes under the mattress!!

And finally continuing the Scottish Theme

How’s the flat you’re living in in London, Jock?” asks his mother when he calls home to Aberdeen.
“It’s okay,” he replies, “but the woman next door keeps screaming and crying all night and the guy on the other side keeps banging his head on the wall.”
“Never you mind,” says his mother, “don’t you let them get to you, just ignore them.”
“Aye, that I do,” he says, “I just keep playing my bagpipes.”

 

Have a great 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.