Morning all,

Well we finally got words of wisdom from Ben. And what words they were..free money forever…his two targets are 6.5% unemployment and 2.5% inflation..until either or its game on still…so pretty much as Jack White says ’Steady as she goes”. So why then didn’t he US cheer and rally hard..not sure really,it should do..the Fed will not be happy with this result..they even released better than expected GDP figures at 1.7% way above the 1% the gurus were going for…the US markets have now finished down ,albeit small,for three days in a row..the worse period for 7 weeks .Maybe with the economy growing so strongly is there really a need for all the free money? But what if the Candy King takes away their lollies too quickly..for the record here’s a graphic of the Candy King…

Aussie dollar has slipped under 90 cents…lowest in three years..RBA will be happy but there goes that overseas trip..Qantas putting up fares and surcharges..money tighter all round..let’s hope the rebound in the non-mining economy happens. Good for resource stocks though at least. Now I know that in theory this is good for exporters and the economy and manufacturers will be cheering(although not many left), but we seem to take it personally if the currency crashes, like it’s some kind of indictment on our performance…just wait til we get to 85 cents…we will be so miserable then!

Strange days indeed yesterday when we saw a whoosh at the opening then backwards all day to finish up a mere 5 points. Pretty pathetic really..volume was low as usual..waiting for reports to come through..Banks led the gains yesterday as the yield argument continues especially with the RBA about to cut rates..don’t forget though that in order for the rate cut to truly work the banks need to pass on the cut ..maybe they will.. maybe they won’t..we shall see but seems that so far the rate cuts have failed spectacularly to work..it’s a political thing and with the Kev13 administration focused on revenue raising is anyone safe? Looking forward to the economic update..should be a doozy…

Still I got it a bit wrong yesterday with my up early a bit then drift to negative day..it was up spectacularly then drifted down but stayed positive…Chinese official PMI today ..should be interesting. So today …think we will ease a little but resource stocks may be better performers relative as the dollar slide helps.

Idea of the Day

SUN reported last night and it was a sweet and sour story…the sour was the performance of its life company and general insurer whereas the sweet was the special dividend!. I guess this shows the strength of the financials institutions balance sheets..now I am no banks analyst but I reckon the issue of special divs will not just be confined to SUN shares..the high yields of the banks will remain attractive…still rank WBC Numero uno followed by NAB and then CBA and ANZ…

Things to make me go all go ICAC!

1.Splashed across the press today was the shame of Labour and some big NSW corporate names.. “Dear Government… I’m going to have a serious talk with you if I ever find anyone to talk to.” Stieg Larrson..

2.AMC has moved to demerge its Australasia Packaging business. Should be a positive for the stock.

3.In Transurban Group Abu Dhabi Investment Authority has emerged as the seller of a 4.8 per cent stake in Transurban Group. Transurban launched the sale of 70.6 million shares, worth $477 million, when the market closed on Monday afternoon.

4.BHP Billiton is facing mounting shareholder pressure to take a “conservative” approach and delay the development of its $US15 billion ($16.6 billion) Jansen Potash project after a major structural change in the market that is expected to force potash prices lower…yet another project cancelled? Gonna have loads of money soon to return to shareholders.

5.Robert Mugabe begins counting in the Zimbabwe polls…one for me ..none for you..ten for me.. none for you…simples!

6.The IMF has stated the obvious when it said that Greece must deliver on its reforms..and it must move quicker to implement those reforms…really? The IMF said Greek debt would peak at around 176% of GDP in 2013, and decline to 124% in 2020, “after additional contingent relief measures of about 4% of GDP from Greece’s European partners to be determined in 2014/15”.

7.Here’s what the Fed said…

FED SAYS INFLATION ‘PERSISTENTLY’ BELOW 2% GOAL COULD POSE RISK …ECONOMIC GROWTH WILL PICK UP FROM RECENT PACE… REPEATS RATES ‘EXCEPTIONALLY LOW’ UNTIL JOBLESS AT 6.5% …SAYS UNEMPLOYMENT WILL GRADUALLY DECLINE… SAYS ‘DOWNSIDE RISKS’ DIMINISHED ‘SINCE THE FALL’… NOTES THAT MORTGAGE RATES HAVE RISEN SOMEWHAT… SAYS IT IS PREPARED TO INCREASE OR REDUCE THE PACE OF PURCHASES.

8.Aussie manufacturing slumps.. too late Glenn.. A gauge of Australian manufacturing slumped in July as a decline in the currency and earlier interest-rate cuts failed to boost exports and local demand.The manufacturing index dropped 7.6 points to 42 last month, the biggest decline since April, the Australian Industry Group said in a survey released today. The last reading above 50, the divide between expansion and contraction, was in February 2012.

9.Facebook finally trades above its issue price…finally…

10.And these Spaniards are fiendish… Spanish police said Wednesday they have broken up a racket by fraudsters who converted ordinary cars to resemble deluxe models such as Ferraris and sold them on the Internet….wonder if I could do that with my Polo…well it sure would surprise my daughter when she gets home from Greece!!

And finally…..

A year four teacher asked the children what their fathers did for a living. All the typical answers came up – fireman, mechanic, businessman, salesman… and so forth.
However, little Justin was being uncharacteristically quiet, so when the teacher prodded him about his father, he replied,
“My father’s an exotic dancer in a gay cabaret and takes off all his clothes to music in front of other men and they put money in his underwear. Sometimes, if the offer is really good, he will go home with some guy and stay with him all night for money.”
The teacher, obviously shaken by this statement, hurriedly set the other children to work on some exercises and took little Justin aside,
“Is that really true about your father?”
“No,” the boy said, “He works for the Labour Party and is helping to get Kevin Rudd re-elected, but it’s far too embarrassing to say that in front of the other kids.”

Have a great day

Clarence

XXXX

P.S.Now I am sure some of you will know Jim Cramer from CNBC and other Financial media in the US..read his book ..the guy is interesting and worth a listen once you get apst the showmanship..anyway ..his words.. “We all know it’s going to end badly, but in the meantime we can make some money.”  —Jim Cramer, CNBC

 

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