Morning all,

As we move nearer to a military strike in Syria ,the World waits. Of course while we wait we are more interested in Miley Cyrus ‘Twerking’, whatever that is. Still it is nice to see the Google searches from the US for ‘where is Syria’ have escalated out of control. So at least this time maybe some Americans will know where they are bombing. As a  result of all this tension, the price of stuff is going up..Oil and Gold primarily.Jim Rogers who knows a bit about commodities has said that expect these to go much higher…bit of an issue here as higher oil kills economic activity …hurts consumers and makes business suffer…so will affect World growth especially in oil import dependent economies like Japan and China.

One of the consequences of the Free Money Tap being turned off in the US..Tapering ..is all that money will be brought home from its overseas jollies..if 10 year rates in the US are nudging up to 3% why have that money in Turkey, India, Thailand, Philippines, Japan ,Brazil etc…Uncle Sam needs it now…and so we are seeing the effects of Tapering already around the World…currencies are being whacked. The Indian Rupee is down nearly 22% for the year! The Brazilian Real is looking a little unreal now too! The problem that we have made for ourselves, in this Brave New World, is that everything is connected to everything..you move one piece on the board and everything changes. But like Kerplunk! Although the US Fed is only mandated to look after its own back yard, the problem now is that this back yard extends somewhat further these days…And that’s why the Central Bank chiefs were warning at Jackson Hole to think carefully about the Global implication before turning off the spriggot.And let’s  not forget that the US wants to sell stuff to emerging markets ,so if they use them as the statue to their pigeon then it’s not good for their growth either!

To the markets..Batman…expect a modest recovery after yesterday’s falls..only modest and maybe push through 5100…I am still pushing the caution approach..there are too many risks piling up at the moment to get very bullish..its not just Syria but you need to feel good to keep pushing multiples up and up on earnings that go nowhere..it’s called a bubble! Seems that every company is paying out dividends ,sometimes for more than they earn in order to keep investors, searching for income, happy..of course what happens to growth plans when all we want is certainty and income..probably not much I suspect…so why the high multiples?

Idea of the Day

A week or so ago I changed my middle name by deed poll to Caution..used to be Danger but now Caution is my middle name…Although I think we can hit 5200 short term, and we nearly did, I have seen the risks pile up..hence the caution..talked about insurance..buying puts..now the time to buy puts is when the market is firing and on an up..

As for stocks…make sure you have some room for some gold exposure…not huge but you never know..things could get interesting!!

 

gold

Things that make me go mmmm!!

Watched the leaders debate last night…these guys are unbelievable…why can’t they just answer the question…honesty and Integrity in Politics?..nah ..lies and disinformation…spin and rubbish..I reckon if voting wasn’t compulsory we should all boycott this farce…see how they like it then! Think the Donkey Vote will be a big show this time out… we get presented with a choice between Abbott and Kev13…Donkey!..Donkey!

‘King’ Carney sets a new  trend with Bank of England chiefs and he has talked openly about stimulus and the circumstances to push and pull it…nice to see some good guidance…

Before we get too carried away with the Dow rise bear this in mind.. Chevron and Exxon accounted for 40 of the Dow’s 48 point gain and the S&P energy sector gained an impressive 1.8% as the rest sat around close to unchanged. And Equity Volumes in August in the US were at their lowest point in 16 years.

CHINESE investment in Australia’s mining sector came to a standstill in the first half of the year but the economic powerhouse has invested in other sectors, boosting its spending in the nation. Australia accounted for 21 per cent of the $US28.6 billion ($32bn) in outbound deal investment from China in the first half of the year, up from 9 per cent for the previous six-month period, a new report by PwC has found.

Catherine Zeta Jones and Michael Douglas have split.

It was 50 years ago yesterday that Martin Luther King uttered one of the most important and brilliant speeches of the 20th Century..I have a Dream…seems that he made it up as he well along too…genius to wing that one!

Obama said this in 2007 when asked about Bush attacking Iran….”The President does not have power under the Constitution to unilaterally authorize a military attack in a situation that does not involve stopping an actual or imminent threat to the nation.”

Fund manager Perpetual has reported a full-year net profit after tax of $60.97 million, up from $26.68 million in the previous year.Revenue increased by $5.4 million to $195.8 million.

“Overall, the Australian sharemarket performed strongly, producing the seventh highest return (+20.2%) in the largest 50 markets in the world, compared favourably with its historical return average (+11.5% per annum since 1882). ” said the company.

One to avoid even though the figures were a bit better..who needs a airline with rising oil prices and disruptions in the Middle East..Dubai may not be quite such a go to destination!! Qantas has climbed back into the black, posting a $6 million bottom-line profit for the year to June, compared with a $244 million loss previously.Despite tough competition on international and domestic routes, and high fuel prices, Qantas more than doubled its underlying earnings to $192 million.

NSW government plans to ban coal-seam gas production near houses and some businesses could lead to more than $500 million of corporate write downs this earnings season as some projects are slashed to just their real estate value. Yesterday AGL Energy wrote down $343m of the value of its NSW CSG land, including one asset by 95 per cent. Another NSW gas hopeful, Dart Energy, has flagged that significant charges will be taken on $118m of CSG assets, while Metgasco, which has $71m of assets in the state, also may take a big hit.

More from the guru Jim Rogers..that bloke on the motorbike.. the Investment Biker..

“When this artificial sea of liquidity ends we’re gonna see panic in a lot of markets, including in the US, including in West developed markets… this is the first time in recorded history that all major central banks have been flooding the market with artificial money printing at the same time. They’ve all been trying to debase their currencies at the same time.”  Now you may think he is being alarmist but remember caution is now my middle name!

And finally…keep those Jokes coming …some are great and unprintable ,some are older than I am but all are welcome…I am not easily offended as you can guess but I do have to censor some!

Here’s a cleanish one………………..from my wife!

A senior citizen bought a brand new BMW Z4 convertible and drove it out of the salesroom.

Taking off down the freeway, he gunned it to 180kph, enjoying the wind blowing through what little hair he had left.

“Amazing!” he thought as he flew down the freeway, enjoying pushing the pedal to the metal even more.

Looking in his rear view mirror, he saw a police car behind him, blue lights flashing and siren blaring. “I can get away from him – no problem!” thought the elderly speedster, as he floored it to 200kph, then 220 then 240.

Suddenly, he thought, “What on earth am I doing? I’m too old for this nonsense!” So he pulled over to the side of the road and waited for the police car to catch up with him.

Pulling in behind him, the police officer walked up to the driver’s side of the BMW, looked at his watch and said, “Sir, my shift ends in 10 minutes. Today is Friday and I’m taking off for the weekend. If you can give me a reason why you were speeding that I’ve never heard before, I’ll let you go.”

The old man, looked very seriously at the policeman and replied, “Years ago my wife ran off with a policeman. I thought you were bringing her back.”

“Have a good day, sir”, said the policeman.

Have a great day

Clarence

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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.

 

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