Good morning all,

Welcome to the next four years…hopefully not another $4 trillion though!!!

Anyway the Dow went it a huge sulk as Romney bit the dust and voted with its feet ..biggest fall this year!!The primary cause of this is the looming fiscal cliff that we have all heard about (if you haven’t you will!!!).It is basically a mandated tax increase and government spending which kicks in next year..to avert the crisis the US Congress must agree! That is the issue ..they don’t and won’t…so we will all face the lemming like prospect of dragging this thing out until either we run over it or at the eleventh hour solve the crisis….until then ..let the games begin!!

Our market yesterday wandered about looking for inspiration until the result was known then got all enthusiastic…that has now evaporated and expect to see a 45 down start to the day…we may try to rally but risk off is the trade for the day..

Sometimes the big stores have a pre Xmas sale..the next few days may be that sale…expect to see banks come under pressure after the dividend chasing is over but TLS will hold up just fine…resource stocks will fare somewhat better as the Iron Ore price and Gold hold up but even the pretty girls get hurt in the bus crash!!

I still see a strong finish to the year so use weakness in the next few days to pick up your favourite stocks!!

Idea of the Day

BRU: Still a buy especially following yesterday’s deal with the WA Gov…

Buru Energy’: plans for a gas project in the onshore Canning Basin have been boosted by a deal with the Western Australian Government. The deal involves the construction of a $A500 million pipeline to supply gas to the Pilbara region. Under the Government’s domestic gas reservation policy, BRU and JV partner Mitsubishi have to deliver gas to the domestic network before gas can be exported

Not only but also…..Volatility set to increase as we head towards the cliff..good time to look at option strategies to take advantage of this.

 

Things to make me go all Wall Street Sulk!(and sulk they did!!!)

1.Its not just the cliff that is focussing the masters of the Universe but also the Obama led push into limiting their power with separation of Investment banks…they were not happy and had hoped that Mitt would lead them to salvation..wrong!!Wrongney!

2.News that the Porn Industry may move from California as it introduces legislation that they have to wear condoms while on the job…

3.Says it all about Portugal as there was a power failure as Man Utd were playing Barca …game had to be interrupted for a while as they searched desparately for some more 2 Euro pieces!!

4.Chelsea win at home in front of 41,000 in the dying minute…3-2 ..well done boys and their esteemed owner has been spotted downunder talking to Linc Energy’s Peter Bond and touring their UCL facilities…this is a man who knows how to pour money into lost causes for some time before payback…should be a nice fit!!

5.Good to see Mark Bouris teaming up with the Millionaire’s factory to take on the banks with mortgages…this will make the residential mortgage landscape even more competitive and is nearly as good as a rate cut!!

6.Despite the next austerity measures being approved by parliament the sad truth is that Greece is slipping ever closer towards the inevitable collapse that we all know is coming..they have just approved their 12^th vote on packages none of which they intend to implement…cannot believe the Trolika falls for it everytime..just leave the Euro already!!

7.Here’s a stock everyone loves to hate..HVN announced plunging prices and lacklustre demand has hit profits again..1^st quarter earnings pretty dismall…sorry Gerry… also in retail land ..retail Adeventures(says it all) went into administration last month having ripped up $114m over the last three years and had a deficiency of $117m when it went into administration.

8.Super Mario admits for the first time that the crisis in Zombieland is starting to affect Germany…only a matter of time…

9.Employment numbers today and Banks starting to go ex dividend….puts a bit more pressure on the market..

10.Here’s a maths lesson for the US ..  In Fiscal Year 2011, the federal government collected $2.303 trillion in tax revenue. Interest on the debt that year totaled $454.4 billion, and mandatory spending totaled $2,025 billion. In sum, mandatory spending plus debt interest totaled $2.479 trillion… exceeding total revenue by $176.4 billion.

This is why their national Debt will continue to climb!!!And mandatory spending is excluding what they spend on Military and discretionary items..Mandatory is just unemployment ,social programs, pensions..anything they cannot get out of by law!!!

And finally….this one from my son!

Sergeant: Didn’t see you at camouflage training this morning soldier?

Soldier: Thank you sir!

Have a great Thursday

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.