Morning all,

After yesterday’s rout was hoping for an up day on Wall Street to soothe the nerves..Not sure that is going to happen as the Dow fell over in the last hour. Yesterday was nasty ,didn’t see that one coming I have to admit. Looks like a $130m sell program didn’t help but still a miserable day all round. The problem now is that damage has been done and confidence has taken a hit, so we need to pick ourselves off, dust ourselves down and get back in the saddle..easier said than done I suspect.

Two overseas stories are once again dominating thinking ,Greece and the Fiscal Cliff.  Now there is a school of thought that thinks that the cliff should be addressed sooner rather than later as the US needs to cut spending as costs for health care spiral out of control. The other school of thought says nah! Let’s kick the can down the round as long as the rest of the world is happy to finance $16trillion of debt at ridiculously low rates, what’s to worry about .Unfortunately that will not last forever. And it is better to be ahead of the curve in reducing debt than wait for the markets to enforce it on you. The cliff is an opportunity to start to address the exploding debt..I suspect that politics will win out and the can will be kicked..

So what now….we will try to regroup and a few things that were oversold yesterday will rally..expect the banks that offer good yield will be first on the shopping list as things try to stabilise. But not in any hurry as it’s not going to rush away any time soon…looks like defensives are back on the agenda…I think my 4700 target is looking a little unlikely given the cliff situation in the US..

Idea of the day

Seven West Media (SWM) Maybe a dirty word ..anything to do with media at the moment is but yesterdays AGM was surprisingly better than expected…this station does provide consistent viewer numbers and is the dominant player in the getting eyeballs to advertisers space. If advertisers accept the 5% rise the network is going for this is another positive…this one is cheap at current levels and should see a move towards 1.60 in the next few months..The best way to gauge the health of the TV channels is to watch their prime time shows..If they have Toyota and other multi nationals advertising then that’s good..ifs it’s the carpet shop in Campbelltown  watch out…have you watched any TEN shows lately..no neither has anyone but if you do it is the carpet shops that are on air!!!

Things to make me go all dark! The clouds parted in Queensland to reveal the eclipse in all its glory!

1. The Gorgon liquefied natural gas project faces a cost blowout as big as $20 billion linked to the strong dollar, and high labour and manufacturing expenses, according to media reports. US-based oil giant Chevron is expected to reveal the $20 billion increase in the Western Australia project, taking its final cost to near $60 billion in total, by the end of the year, according to the Australian Financial Review…..this is why BHP is looking to export gas from the US to Asia!!

2.Ten Network: Ratings and revenue will be the future focus of the company. In its annual report for 2011-12, released yesterday, chairman Lachlan Murdoch said that the TV broadcaster had its costs under control. He said that it is now working on improvement of its financial performance and its ratings

3.Scary stuff but Google now earns more in ads than the whole of the US Print media business!!!

From  http://www.statista.com/topics/1001/google/chart/709/google-s-ad-revenue-since-2004/

4.’The Big Bogan’,Nathan Tinkler, looks to have avoided his troubled horse stud Patinack going into liquidation after settling claims with the Tax Office and Work cover…good one Nath…hope you paid the small suppliers as well.

5.The US federal deficit rose substantially in October,22% more than a year ago. Spending is far ahead of revenue..this is unsustainable…warning terrain! Terrain!..pull up ..pull up…

6.SPI is trading slightly higher but will take baby steps to recover. Better commodity prices will help though

7. Japan’s economy contracted in the latest quarter, signaling that like Europe it may already be in recession, further weighing down world growth. On an annualized basis, the world’s No. 3 economy shrank 3.5% in the July-September quarter, the government reported Monday. It was in line with gloomy forecasts after Japan’s territorial dispute with China hammered exports that were already weakened by feeble global demand…..

8.A survey showed that hedge funds are the most optimistic on equities in more than 5-years after global growth expectations climbed to an 18-month high. Hedge-funds net exposure to stocks rose to 40 percent, the highest since 2007 according to a survey of global asset managers completed post Obama’s re-election.

9.Looks like more top jobs in the security forces in the US are in jeopardy as the Petraeus scandal widens… love the email ruse

10.Next solar eclipse will hit Sydney in 2026 so ‘umbraphiles’ take note although 1 occurs over the Earth every 18 months…great for the tourist industry in Queensland..just need it more often.

11.AGMs happening today…..FMG MCR MGX QUB RDF REA WES.

And finally….if dogs could send text messages…Grey texts are the dogs..green the owner

 

 Have a great day..back on TV this afternoon!!

Clarence

XXXX