Morning all,

Another lacklustre start..yesterday was slightly better than I expected we had the now traditional whoosh at the start then a wump down then a bit of stability for the rest of the day…so here we are Groundhog Day! Uncle Ben was pontificating last night so analysts will pour over his speech.Not sure there is much to get excited about..Gold was a little better and SPI futures are up 1…Iron Ore was unchanged..I reckon with all the upgrades to the Iron Ore price by brokers it has seen the top..they were all downgrading like crazy when it got to 87 now they are upgrading..come on boys, sort it out!!Usually the sign of the top when they all come out with a new upside target!!

The market is still looking to grind higher and as deposit rates fall investors are having no choice but to look again at the stock market..I think we will see 2013 much the same as 2012 for the next half at least with the market underpinned by yield and demand.

Some time ago I talked about buying the Chinese market through ETFs if you, like me, thought that the Chinese market would lift off after the change in leadership..well hope you did listen as it sure has!!!up over 10% since then…IZZ is the code on this one…was 3600 around beginning of November when they changed horses and now over 3900…This is a bet on Lower Aussie Dollar and higher Chinese market..

 

Idea of the Day

It appears that I am flogging a dead donkey with my call on LYC but I am going to stick to my guns on this one(gotta love mixed methaphors!)..I do believe that once we see stuff being produced, delivered and paid for then the market will see the potential..environmental problems aside..there was news this week that the big US rare earth producer Molycorp are having problems..this has to be good for LYC..this company is becoming more strategic by the day…the question is do we want the Chinese to control this market completely or do we want a rival to keep them honest…I go with rival..LYC!

 

Few Things to think about

1.Billabong gets another tap on the shoulder…these guys must have something that everyone wants..feels a bit like trying to get a beautiful girl to go home with you only to find out she is not a girl after all!!!

Billabong waited until after the close of trading on Monday to report that a consortium involving US private equity firm Altamont Capital Partners and VF Corporation had lodged a bid to acquire all of its shares.

By offering $1.10 per share, the consortium has virtually matched a takeover offer lodged in December by a consortium led by Billabong board member and top executive Paul Naude.

2.Hope the ‘Big Bogan’ has some cash stashed somewhere… News agency Reuters reported that Mr Tinkler’s main lender, Noonday, an arm of US hedge fund Farallon Capital, was in talks with Shenhua and an unidentified Japanese firm, about the sale of Mr Tinkler’s 19.4 per cent stake in Whitehaven, which was worth $675 million at yesterday’s closing price of $3.43, up 4¢ or 1.2 per cent….trouble is he owes a bit more than that…zero to hero and back again in record time…bit like Lance Armstrong!!

3.In the UK the venerable HMV has called in the Administrator…22% market share of music in UK but still bust!!

4.Apple shares about to break 500 bucks…230 Hedge Funds in the US own this puppy..if it breaks 500 next stop 480..iphone 5 not quite the game changer they thought..still got my 4..what more can a phone for goodness sake..Market cap of Apple is US$490bn  around 38% of ASX 200 Cap!!

Last night in New York the computer traders pushed Dell up 10% in four minutes after they read the headline about a Private Equity Bid for the company..no details or source quoted but up it goes..the lunatics are really well and truly in charge of the asylum!

5.Gross leverage, a measure of hedge fund borrowing that shows how much their holdings exceed the cash invested by clients, was 153 percent in the week ended Jan. 4, up from an average of 152 percent in 2012 and 143 percent a year ago, according to data from New York-based Morgan Stanley. The level has averaged 143 percent since 2005, the data show.

Managers are borrowing more amid a 15 percent rally in the S&P 500 since June, a gain that was mostly missed by professional investors who speculated shares would fall, according to data from Hedge Fund Research Inc. and International Strategy & Investment Group.

6.Uncle Ben tells Congress to stop squabbling and raise the credit card limit!!The Fiscal Bluff was not solved it was pushed back…so it still needs the idiots on the hill to do something…the risk of a US default is still real…now the thought of that coupled with the massive overleverage of the hedge funds and computer trading pushing stocks in the blink of an eye, all adds up to a big problem..so sort it!

7.RIO production numbers today….

And finally….

Two Jewish guys are walking when one notices a sign on a Catholic church that says “Convert to Christianity, and we’ll give you $100.”

The one says to the other, “should we do it??” The other says “NO!! Are you crazy?” The first guy replies “Hey, a hundred dollars is a hundred dollars… I’m gonna do it.” So he walks in to the church, and little while later, he walks back out. The friend says “well, did you get the money?” He replies “Oh that’s all you people think about, isn’t it??”

Have a great day

Clarence

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