Morning all,

Apologies for the late note this morning as I have been in presentations all morning. Once again though we are in for a quiet day. Hopefully we get no more earnings shocks or downgrades like QBE’s yesterday which was a train wreck. Expect the market to meander about as we wait for more news from ‘Zombieland’ on Greece and the Fiscal Cliff.

Having talked a little about the fiscal cliff yesterday and maybe it not being such a bad thing, I have now read a number of articles about it agreeing with me!!!. The Republican argument about rich people suffering by paying more tax is a nonsense. And let’s face it for the US to cut back on spending is probably a good thing too so although there is some trepidation about this event ,it may not be the end of the World… just the start of the US addressing its massive deficit that we conveniently forget from time to time. Undoubtedly the budget cuts and tax increases will have an effect on the US economy but they will have to come at some stage…they should use this moment to start addressing their issues when they want rather than when the market turns on them. If there has been any lessons learnt from Europe ,it’s that it is better to move sooner on deficits and timing of your own choice than have the markets impose them on you or worse still a Troika!

Looks like some of yesterday’s dogs are back in the shelter again this morning with QBE,LYC and CAB down early..I am surprised about LYC as it was my idea of the day yesterday but a certain amount of panic always sets in when the placement price is breeched..I hope that long term holders will be rewarded in the months to come.

Banks are a little weaker early except for CBA which continues to find lovers.

Idea of the Day-First Avoid QBE for the time being…more downside to come..

 

One to look at in the Iron Ore space that may appeal is IXR..currently around 14 cents …good September quarter numbers and proactive management operations cash flow positive and strategy pretty sound …speculative buy!

Things that caught my eye..you can tell when its quiet if I have to go international…

1.Multinational companies are paying little or no tax on their earnings in Britain, angry MPs have charged at an unusual hearing involving Starbucks, Google and Amazon. MPs were sceptical, for example, about the coffee chain Starbucks’ claim that it is not making profits in Britain….don’t you love transfer pricing!

2.BHP is talking about exporting gas from the US to Asia..probably not what STO and OSH want to hear ..nor probably WPL but as the US moves towards self sufficiency in oil due to ‘fracking’ and its shale expansion this will probably be on the agenda!

3. Japanese consumers are closing their wallets as the economy’s outlook darkens, making it harder for Prime Minister Yoshihiko Noda to stave off the nation’s third recession in four years.

Households are holding the most cash since 2005, shunning risk as they grow gloomier, Bank of Japan data indicate. Sliding private consumption contributed to an annualized 3.5 percent decline in gross domestic product in the past quarter, a Cabinet Office report showed yesterday.

4.Halo 4 has achieved sales of $220m in the first 24 hours…and yesterday I read in the SMH that one 16 year old is earning $50,000 a month from social media and apps..the times they are changing…shame it’s not my 16 year old!!

5.Zombie finance ministers have announced another meeting on November 20^th to discuss Greece and its impending default!!Looks like they are still seeking another two years to implement the cuts to make it more palatable to its citizens…trouble is they will then need more money to pay the interest in those two years

6.Good to see some green from a  trading update on IPL currently up 5%..full year numbers up 10%..

7.And anti-virus pioneer McAfee is a wanted man in Belize for murder….the picture of him looks scary enough to charge him with something!!

8.A fabulous performance from Michael Clarke who has saved the day for Australia in the first test…

9. The New York Stock Exchange cancelled trading and closing auctions in 216 securities after a malfunction in a computerized “matching engine.”The affected stocks, which included such companies as Travelers Cos. and U.S. Steel Corp., continued to trade on other exchanges, including the Nasdaq Stock Market. The exchange anticipates a “normal trading day in all securities tomorrow,”

And finally…..

When NASA first started sending up astronauts, they quickly discovered that ballpoint pens would not work in zero gravity. To combat the problem, NASA scientists spent a decade and $12 billion to develop a pen that writes in zero gravity, upside down, underwater, on almost any surface including glass and at temperatures ranging from below freezing to 300°C.

The Russians used a pencil.

 Clarence

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