Morning all,

Finally nice to see a little green on the screen after last week’s poor showing. It would be nice if it lasted but events in the Middle East appear to be getting worse and this could throw a spanner in the works. I remember writing a few weeks ago about how once the election in the US and the Chinese leadership change had been and gone then maybe we could get some clear air for a run into the new year. However, Obama’s election has brought the fiscal cliff more sharply into focus. Nowhere is no doubt that the US needs to cut spending and raise revenue….the problem is they are mandated to do it all in one go…estimates that it will knock 4% off the GDP and send the US spiralling into another recession seem to be somewhat exaggerated but it will have an effect none the least…instead of the cliff we need to have the fiscal foothills as we descend calmly and gently down to the promised land of spending cuts and revenue increases in a measured and almost invisible way. Some conciliatory words from John Boehner helped the Dow rally as Obama went walk about in Asia. Fingers crossed!

This week we get another summit in Zombieland amid some tension between the ECB and IMF who do not like the fact that the Greek target dates are being put back…now here’s something you will not hear in 10 years time…”the Greek miracle economy once again goes from strength to strength after if s near death experience 10 years ago. It is now the envy of Europe with low employment and rapid growth as its move into the digital era continues a pace, with news that Google are moving their headquarters to the Silicon Acropolis to join Apple and Microsoft…sorry got carried away there but that is NEVER going to happen!!!As they say the road to hell is paved with good intentions…oh and we have a

In our market this week ,once again overseas news will dominate…Zombieland, US cliff and now Gaza plus of course we have a continuing stream of AGMs to work through too…volume to remain lower than normal and volatility on the open the main driver then tread water the rest of the day…would expect a better week!!!

Idea of the Day

BDR:

This Brazilian Gold miner, very shortly a  producer, has held up really well ..much better than other Golds last week…they are pouring their first Gold very soon…low cost producer with Iron Ore credits..quality management and in a mining friendly country…good incentives as well from local government in the Amazon Basin area. BUY at 95 for a move to 1.10 when they pour and the gold price recovers!

Things to make me go all Gaza Strip…and that’s not a Paul Gascoigne(English footballer of some notoriety) night club antic.

1.Billabong gets a sniff from the inside as its US chief tells company that he can do a better job when it is his money than when he is running it for them..!Management Buy Outs always seem a little perverse …we can make more money if you let us keep it..well good luck to them.

2.Mesoblast denies the rumours and issues statement saying that Teva is still their best mate…stock up 10%

3.Talked BRU on the TV Friday and the stock has moved up on more promising results today…will need to see some more numbers from Ungani before getting too carried away as porosity could be an issue.

4.In the news today, Stripping the ASX of its monopoly on post-trade clearing services could lead to a hollowing out of local financial markets and risk the stability of the financial system, chief executive Elmer Funke Kupper warned, plus Qantas, a  plan with venture capitalist Mark Carnegie would push for sale of loyalty program and partial float of Jetstar to return capital to holders. The situation is described as ‘very fluid’, with no formal proposal formed, albeit a full takeover of QAN is not being considered.

5.IXR which I was keen on last week has gone into a trading halt pending a capital raising? Actually looks like it has sold one of its smaller projects Mt Woods ..potentially good news.

6.BLY yet another downgrade….looks like they were late to cut labour cost again. Stock actually rallies..go figure..it’s a downgrade guys!!!

7.Lewes Hamilton wins in Texas..it all comes down to Brazil!!!Go Lewes!!

8.CSL pushes up again towards 50!!!should get there in the next day or so!!

9.Israel talking about widening the action in Gaza…ground troops would be a serious escalation..spare a thought for the poor citizens of that region what ever side they find themselves on..they seem to take all the casualties.

And finally my thanks to a UK client for this gem today…

Two women were playing golf.

One teed off and watched in horror as her ball headed directly toward a foursome of men playing the next hole.

The ball hit one of the men. He immediately clasped his hands together at his groin, fell to the ground and proceeded to roll around in agony.

The woman rushed down to the man, and immediately began to apologize.

‘Please allow me to help. I’m a Physical therapist and I know I could relieve your pain if you’d allow me, she told him.

‘Oh, no, I’ll be all right. I’ll be fine in a few minutes,’ the man replied. He was in obvious agony, lying in the fetal position, still clasping his hands there at his groin. At her persistence, however, he finally allowed her to help.

She gently took his hands away and laid them to the side, loosened his pants and put her hands inside. She administered tender and artful massage for several long moments and asked, ‘How does that feel’?

Feels great, he replied; but I still think my thumb’s broken!

Have a good Monday

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.