Morning all,

Looks like it’s going to be a day in the red today as weaker than expected US Manufacturing took the wind out of the sails! However all eyes will be on the RBA this afternoon..now I am not an economist as you know and every one of them now thinks that the rate cut is a given(good to travel in packs)…well I still believe that the RBA will hold fire. Despite the worsening local economy and the now rapidly deflating mining boom, I still believe that the news out of Asia and especially China will stay his hand..plus he may want to keep some powder dry in case thing s get nasty again if the cliff is reached!…and if he does cut then the big beneficiary will be the banks and the market as they use it as an excuse to cut deposit rates..that will ensure the hunt for yield will continue…TLS, Banks etc …CBA hit an all-time high yesterday..who said the stock market was dead!!

Anyway today it’s time for the Coles Theme to play…’down, down prices are down!!’Nothing too disastrous but easing a little..we have had a good run and we need to pause for breath…I am hopeful that Santa is firing up his sleigh and giving the reindeer a good talking too…the market does seem underpinned so any more good news will push it higher…

The Government looks to be softening its stance on the $1000 GST threshold a little..this would be (illegal download) music to the ears of the retailers..especially HVN and JBH ..DJS and MYR will also be winners if this happens..not likely for a while but it’s out there now..would be better than a rate cut..after all the banks don’t pass it on anyway!

Banks will hold up better than most but MQG looks to be vulnerable to a pullback after its short squeeze…our analyst still rates them underperform!

Down 12  points today I expect until rate cut decision then …well we shall see….

Idea of the Day

 

LNC Energy: This one has been much unloved and maligned,…they have put together a couple of deals in the last few days that will help..Adani coal project royalty in now going ahead and deal with South Africans looks better than the Chinese deal..They still need to cut the cash burn but at least its turning around slowly…let’s hope the pace builds as they don’t have the luxury of time! The UCG business sucks $30m cash out of the coffers every year so needs to generate some income soon!!

One for the brave but BUY below 70 cents for a move towards 85 in the next few months!

 

 

Thinks to make me go all Ricky!!

1.Enjoy your retirement Ricky (sorry, how can you take anyone seriously called Ricky) anyway a great Cricketer…we will miss you..

2.Aussie Robert Thomson named as head of News International..that’s the publishing side of NCP whilst the TV side etc will be called Fox …

3.NAB Chairman offers strong support for NAB CEO Clyne…as Brutus once said in order to stab someone in the back it is necessary to get behind them…and Brutus was an honourable man….something most bankers seem not to be!

4.Telstra plans to launch its own low-cost phone and internet brand if corporate regulators reject its purchase of Adelaide-based Adam Internet, according to its senior executives (AFR, p. 24). Meanwhile the company has opened four new data centres as part of an ongoing $800m investment in cloud technologies that the telco is hoping will net it more lucrative government and enterprise telecommunications contracts

5.Southeast Asia’s fast-growing economies and rising middle class are attracting investors and sending the region’s stock markets higher. The main indexes in Thailand and the Philippines are each up about 30% this year..not too shabby!

6.A fascinating fact ..the Greek National Anthem has 58 verses…they can’t even cut costs there!!What hope is there for the rest of the economy! Last night as well it launched a massive bond buyback…they are trying to buy back privately held debt with a face value of 62bn Euros on a voluntary basis of around 30-40 cents on the dollar…tempted?

7.Warning! Warning! US Debt ceiling approaching..$16.4tn and counting..only 63 bn away from hitting the glass ceiling!!And no closer to solving the fiscal gulf it seems!

8.France is no longer a sexy place to do business as a wave of entrepreneurs are leaving the country as Hollande starts to hit the rich with higher taxes..there will be a 75 % Millionaires tax…I still remember the mass exodus from the UK when the Labour Government in the UK slapped so much tax on the superich..one unintended consequence was a raft of terrible films that starred Michael Caine..He was the only high profile celebrity that stayed..so he had to do something to pay the tax bill…who can forget “The Swarm”…classic…so with France who knows what horrors Gerard Depardieu will inflict on the World…Les Miserables II perhaps…Les Tres Miserables maybe!

9.And from the Herald maybe another reason to own ultility companies! AGK springs to mind!

NSW households are facing another round of rises to electricity prices which will absorb much of the $250 in savings the Prime Minister flagged on Sunday will be shaved off the annual household electricity bill. One of the largest electricity suppliers to NSW households, the Hong Kong-owned EnergyAustralia, on Monday outlined plans to raise prices by up to 10.5 per cent over the next three years.

10.BG says costs are now under control finally…probably doesn’t help the mining services sector which will be under the kosh for some time to come…they have had it so good for so long ,bad practices and costs blow outs were inevitable…this is coming to a shuddering end!!Finally.

And finally….

A Really Bad Day

There was this guy at a bar, just looking at his drink. He stays like that for half of an hour.Then, this big trouble-making truck driver steps next to him, takes the drink from the guy, and just drinks it all down. The poor man starts crying. The truck driver says, “Come on man, I was just joking. Here, I’ll buy you another drink. I just can’t stand to see a man cry.””No, it’s not that. This day is the worst of my life. First, I fall asleep, and I go late to my office. My boss, outrageous, fires me. When I leave the building, to my car, I found out it was stolen. The police said that they can do nothing. I get a cab to return home, and when I leave it, I remember I left my wallet and credit cards there. The cab driver just drives away.” “I go home, and when I get there, I find my wife in bed with the gardener. I leave home, and come to this bar. And just when I was thinking about putting an end to my life, you show up and drink my poison.”

Have a good Tuesday!!

 Clarence

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