Morning all,

Another big night overseas with the Dow going nowhere in anticipation of the FOMC meeting in the next couple of days..but the big news was in Banks and Potash…First to the Banks…the UK ‘s biggest bank Barclays announced a massive rights issue to shore up its balance sheet.5.8bn Pounds and at a 40% discount…pretty huge by any standards..suspect this will sap the global demand for banks a little..not sure it will really affect us too much but the international punters won’t be chasing us to extreme levels again..that is apart from CBA which is pregnant with dividend. Gotta love these dividend chasers..and in other news Potash(fertilizer) was hammered last night as a Russian company OAO Uralkali,the world’s largest potash producer, decided to leave the cartel which decides on price. Now these guys control 43% of the Worlds supplies and have forecast a fall of around 25% in price as they export more to China…doesn’t look good for BHP and their Canadian Potash expansion…looks like another project bites the dust much like Olympic Dam…

 

Anyway as we too await Uncle Ben and the Free money round we had the RBA chief Uncle Fester weighing in yesterday….there does seem to be a change in focus of the great man…I think he is scared..I think he is genuinely worried that as Mining Investment finishes there is nothing left…well after having high interest rates for so long and making our Aussie Dollar the currency to travel with around the World he finally seems to have realized that he is well behind the curve and that he has to do something more to try and kick start the economy…so the rate cut next week seems a given…I have been saying that they won’t cut but after yesterday’s word looks like they will..so what does that mean..lower dollar ..lower deposit rates and a smidge off your mortgage..so little that you will be hit with a petrol increase which will wipe it out anyway…but for the market it will make those yield stocks more attractive.

 

What to expect today..another nothing day..resources to weaken perhaps as commodity prices fell slightly..banks to weaken a little on the Barclays news…

Maybe a positive start then waning to a small negative..Japan looks to be opening weaker ..down 10 day ahead…I remain mildly positive as punters chase yields…but don’t expect too much from our results season and you won’t be disappointed…

 

Idea of the Day-Sell JBH…the chart is just ridiculous..talk about a short squeeze!!

 

Now it’s not often I put a sell idea on a stock in this spot but had a look at JBH this morning currently trading at a two year high..really?…are things that good…don’t think so…lower dollar makes goods more expensive and despite the rate cuts not sure the consumer is really out there spending big time on tech stuff and CDs etc…so if you have any of these maybe it’s time to take the money and run and if you have the facility to short stocks …well just saying!

Good to see MQG rallied after my little rant yesterday…

Things to make me go all Family Ties that bind!!

1.Good to see that Gina stitched up her family with a clause that meant that her kids lost their shares in Hancock Prospecting if she was no longer in charge of the trust.Must be fun round the table at Xmas!

2. Kingsgate Consolidated: said it would slash the workforce at its Challenger goldmine in South Australia by one-third, cut the salaries of senior executives by 20 per cent and reduce directors’ fees by 10 per cent to try to pull $25 million out of the miner’s costs… Diggers and Dealers is shaping up to renamed Cost-cutters and Cancellers! Won’t be a happy affair this year.

3.The Shanghai index is valued at 10.7 times reported earnings, down from 29 times at the peak in 2009. The index, which traded at a 59 percent premium versus the S&P 500 four years ago, is now 34 percent cheaper, the biggest discount since Bloomberg began compiling the weekly data in 1997.

4.Now I know that Jamie Dimond is the Teflon Man but these guys have just been fined $410m to settle the probe by the US Energy regulator..go J P Morgan. “JPMVEC admits the facts set forth in the agreement, but neither admits nor denies the violations.”

5.Few things today domestically.. RBA private sector credit for June – 11.30am In companies news: Origin Energy fourth quarter production Paladin Energy June quarter report

6.What’s the World safest currency? The US Dollar…Nah..the Pound..definitely no..the Swiss Franc ..could be….the Aussie..right!…no its probably the Norwegian Krone.. Norway’s central bank, which issues the krone, has among the highest capital ratios of any central bank in the world at 23.3%.Moreover, the Norwegian government has zero net debt, i.e. its total financial assets far exceed debt.Norway isn’t part of the European Union, which means that Norway cannot be stuck with some other nation’s liabilities (just as we see Luxembourg stuck with a share of Greece’s bailout…)Last, the krone is not pegged to any other currency, so it can’t be dragged down with a sinking ship.

7.Looks like NINE is pushing ahead with its plans to list the company valued at 1.2bn ..still the one?

8. Resolute Mining which operates mines in Africa and Queensland, revealed that it would freeze salaries for all senior management positions and wear a $70m impairment on the value of its investments. The write-down primarily relates to its investment in struggling gold play Noble Mineral Resources.

9.WOW yesterday announced its numbers which suggested they are running out of growth options…they are confident of getting growth back to 10% rather than the current 4.8%..not sure where though..they say they are going to target smart shopping..to any bloke that is an oxymoron!

10.Bradley Manning facing 136 years in Gaol…sentencing to come but looks like he will have plenty of time to plan his escape and dig that tunnel!!

And finally…thanks Marilyn and all my fans for sending me jokes…good to finish with a smile…

My wife said she was leaving me due to my obsession with the 60’s group The Monkees.

I thought she was joking …….. And then I saw her face……

Have a great day

Clarence

XXX

 

 

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