Tasmanian Times

The individual has always had to struggle to keep from being overwhelmed by the tribe. If you try it, you will be lonely often, and sometimes frightened. No price is too high for the privilege of owning yourself. ~ Friedrich Nietzsche

The individual has always had to struggle to keep from being overwhelmed by the tribe. If you try it, you will be lonely often, and sometimes frightened. No price is too high for the privilege of owning yourself. ~ Friedrich Nietzsche

Economy

The Oracle’s Market Update: Penny-dreadful Gunns

Changes are afoot in broking circles.

The traditional, amply padded, cigar-chewing stockbrokers are now retiring; replaced by a generation of hawk-faced triathletes with commerce degrees.

The smell of fear when markets turn sinister hasn’t changed though.

The mood varies from mild panic to capitulation, with many market participants still shell-shocked from the 2008 collapse.

Things started well enough this morning, with the local bourse picking up around 25 points.

Then the rot set in, with the All Ords closing 55 points in the red.

The young brokers have been flat out processing margin calls, which do little to ease an already fragile market. Plenty of novice investors are now learning the perils of piling up debt as a means of entering the share market.

Gunns was close to the worst performer of the day again, hitting 20 cents which puts it in the penny dreadful basket.

There was a reprieve of sorts in the afternoon, with a trading halt called until Julia and Lara nut out how to transfer taxpayer funds to the near-insolvent logger. Murdoch-backed Dow Jones newswire suggested the position could get much worse if the logger looks to sell equity to fund the pulp mill.

After market close, mining colossus RIO announced first half earnings of $11 billion, warning that European debt problems were clouding the outlook. Analysts might not be pleased with that $11 billion figure, hoping for closer to $13 billion.

In overseas markets, the US again looks touchy, although Apple and Google might be popular enough with investors to hold the market up for most of the session.

Ed: Gunns Ltd Share Price HERE

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5 Comments

5 Comments

  1. Factfinder

    August 4, 2011 at 11:55 am

    Video – The Law has a long memory –
    http://media.theage.com.au/business/business-week/french-court-orders-probe-into-lagarde-2537677.html
    French court orders probe into Lagarde (02:11)
    A French court has ordered an investigation into the role of IMF head Christine Lagarde when she was a finance minister.
    05/08/11

  2. Merk

    August 4, 2011 at 3:07 am

    It’s beyond a risk – a certainty – that any dollar gifted to Gunns Ltd from the Tasmanian Treasury goes against the taxpayers’ interests.

    It’s a great time to exercise your democratic muscle, readers of TT. Write to your ‘representatives’, tell them how you really feel about their ‘honourable’ governance. Also this weekend there is the opportunity to black flag the ALP conference (at Country Club Casino – how apt), and to tell Bob Brown what you think of the Greens role in the SoP at his Rally for Tasmania’s Forests and Future. It’s a great time to have a voice.

  3. Mike Adams

    August 4, 2011 at 1:50 am

    One does wonder what pressure the ANZ bank can put on the two ladies…

  4. Barnaby Drake

    August 4, 2011 at 1:29 am

    I think they should put up a large notice in Salamanca Square saying:-

    You’re not listening, Lara!

  5. Mark

    August 3, 2011 at 10:07 pm

    Of course the risk will be that any government funds granted to Gunns will be sucked out once the trading halt is lifted and Gunns will remain a basket case. This is not to say that a JVP is not in the wings waiting for the same grant.

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