Morning all,

The Zombie’s cheered the Greek fix ,whilst in the US comments by Senate Leader Harry Reid that they have made little headway on the Fiscal Bluff caused a late sell off in the Dow even though we had some positive consumer sentiment and housing figures. Now we have sorted Greece, it’s going to be all about the US budget.

Yesterday our market basked in the sun. Most sectors were positive and TLS went crazy! CSL was the stand out after its AGM. Gerry Harvey has warned that retailers are all going bust after Xmas..all that is except him..Just as an example I need a new pool chlorinator..quote from the shop $1345…ebay $788!!And they say they match prices…well they seem to have gone awfully quiet after I told them what the price was on ebay!! Not an easy time to be selling stuff …even our local Mac Shop has given up their prime high street position and moved out of sight! The times they are a changing.

So to today …well after the party the hangover…let’s face it though it wasn’t much of a party..wasn’t schoolies or a big 21st..so the hangover is likely to be equally muted but probably a down 15-20 kind of day.

Mr Myagi would be proud of the risk on/risk off trades at the moment…volumes remain low and the markets are dominated by traders and computers.The Implied volatility in the US is at a record low and not much better here..I am continually disappointed by the premiums I get for clients in selling options…considering the volatility that is possible it does seem cheap but apathy is a hard habit to break.

Idea of the day

We have an energy conference today so expecting some good stories to emerge from that..couple that I am keen to hear updates on are KPL and BRU…KPL is well worth a look! Speculative sure but chock full of potential.

My belief that the media stocks were undervalued is taking hold..FXJ looking good and the SWM still putting on the ritz as the gloom lifts a little..I have said on FXJ that it is not their product that is broken it is how they charge for it, that is the issue. They have still got one of the best digital content businesses in the World, they just need people to pay for it..if they cut costs too much and the quality goes, no one will pay for it when they can get so  much free..it’s a difficult balancing act but for my money FXJ has been one of the worse run businesses around for some time..I know it’s tricky in this digital age but they should have been bold and moved early. It’s not too late but they must embrace the new world order.

Things to make me go all Arab Autumn

1.Things remain pretty tense in Egypt…not making headlines but Mursi move to grab more power than a Pharaoh is provoking a violent reaction…if things get worse ie he doesn’t back down, we could see some extreme violence grip the country again and the Suez Canal is but a stones throw away..expect Oil to be well supported in this environment.

2.There is a school of thought that the US consumer is deleveraging…but defaulting would be a more appropriate term..School debt is going gangbusters and delinquencies are rising at an alarming rate! As at Sept 30 outstanding loans stood at nearly 1 trillion dollars and balances over 90 days due are at 11% and growing..

3.Looks like Argentina is having a few issues as well as their Zombie cousins..Don’t cry for me eh!

4.OECD cuts its growth forecasts for the galaxy and warns on the fiscal bluff…

5.The QAN feud is growing as it abandons its 40 partnership with Tourism Australia..its Dixon v Joyce at 10 paces…I have my money on Dixon..he has more friends..Alan Joyce very few I suspect after his term at QAN

5In the news today. Canning Basin explorer Buru Energy says its landmark gas deal with the WA government has the potential to open up the remote region both for domestic gas sales and, in the longer-term, for LNG exports

6.WPL: Woodside Petroleum chief executive Peter Coleman has ruled out investing in the emerging east African oil and gas industry, declaring the company will focus instead on being an “early mover” in cheaper frontier nations such as Myanmar

7.CHINA: The fall in the Shanghai Composite, already one of the world’s worst performers this year, comes even as China’s economic outlook brightens after nearly two years of slowing growth.

8.Excelsior Gold: intersected some bonanza grade results from the company’s Zoroastrian deposit within the Kalgoorlie North Gold Project. The results extend the high grade gold mineralisation down dip and along strike, with highlights including: 4 metres at 753g/t gold from 128 metres, within a broader zone of 11 metres at 275g/t gold. This also includes an individual one metre interval assaying 2640g/t gold and represents the Royal Mint Lode position to the west of the previously mined Zoroastrian open pit.

9.North Korean leader Kim Jong-Un has been named 2012’s “Sexiest Man Alive”, China’s Communist Party newspaper proclaimed on Tuesday after treating a spoof award by satirical US website The Onion as genuine. And they bought it!!!

10.the Shanghai market slipped below 2000 yesterday..as hopes for stimulus from the new regime are fading. Economy is improving though but the betting public are deserting in droves to go to the casinos in Macau as volume slips to 2008 levels!

And finally…

A magician was working on a cruise ship in the Caribbean. The audience was different each week so he did same tricks over and over.

The problem was, the captain’s parrot saw all the shows and began to understand how the magician did every trick.

He started shouting in the middle of the show: ‘Look, it’s not the same hat. Look, he’s hiding the flowers under the table. Hey, why are all the cards the ace of spades?’ The magician was furious but, as it was the captain’s parrot, he could do nothing. Then one day the ship sank and the magician found himself floating on a piece of wood with the parrot.

They glared at each other but said nothing. Finally, after a week, the parrot said: ‘OK, I give up. Where’s the boat?’

 

Have a great day

Clarence

XXX

 

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.