TVN still rising on announcements. rose again today 10% , then dropped back to rise of 6.67% (J curve jumped to 94% just before the "correction"
Have a look at the graph pic to 3pm.
I go to www.google.com/finance and have a free account. When you search for a stock you put items in watchlists and I tend to be guided by the technicals.
by that I mean, when you look up ASX:TVN for example, just below the 1st graph you can add technicals, and create more mini graphs.
I add Bollinger, and am guided by the past and potential squeeze of the 3 points, which often indicates a sudden rise is imminent.You can search internet for more on these technicals.
I also add KDJ which is similar. I watch the J curve to make sure it is not above the others or above 70%.
I also add MACD another indicator of volume etc.
when you scroll down you can also see other companies in similar field, and you cna see if they rose or fell that day, plus other vital information.
Try it yourself and read the announcements for that stock, which are linked on the top right hand side.
Remember we are not financial advisors. Sampson Management Services (SMS) educate and inform only...We are Assett Management Consultants- we teach you about risk and how to measure that risk according to the international standards on Quality, Environment, OHS, and Risk management in an integrated approach. Ref standards: AS/NZS/ISO 9001, AS/NZS/ISO 14001, AS/NZS/ISO 4804, AS/NZS/ISO 4360.
Megamoneybox address is http://Megamoneybox.blogspot.com.au We try to help you earn money on the internet.We give free share trading tips. We aim to educate and enthuse. We are in Australia in the land of the Sun. We are asset management and risk consultants, are not financial advisors. You Trade at your own risk. We could be wrong. So do your homework. Go to our other blogs to de stress. We are not big risk takers. We asses, investigate, analyse and then decide.
Showing posts with label fortescue metals group limited. Show all posts
Showing posts with label fortescue metals group limited. Show all posts
Wednesday, July 6, 2011
Tuesday, June 8, 2010
axe the tax... protest today
Protesters pressure PM to 'axe the tax'
ref http://au.biz.yahoo.com/100609/31/2diqb.html#Scene_1
Wednesday June 9, 2010, 4:09 pm
A 2,000-strong crowd has gathered on Perth's foreshore to protest against the Federal Government's mining super profits tax.
United under the slogan "axe the tax", the protesters rallied outside a hotel where Prime Minister Kevin Rudd addressed a Press Club luncheon.
But Mr Rudd is showing no signs of backing away from his tax reform ahead of his showdown with West Australian mining bosses.
Senior ministers have followed Mr Rudd to the west and will hear first hand what voters think about the tax at a community cabinet meeting this evening.
Mr Rudd will meet Fortescue Metals Group's Andrew Forrest, who has been one of the loudest critics of the tax, ahead of the meeting.
Mr Forrest joined the protesters who included Australia's richest woman, Gina Rhinehart.
She says the time for talking is over.
"Perhaps if there had been negotiations earlier it would have been different, but now the damage to Australia has gone on for too long," she said.
A number of Liberal MPs also attended the protest, including Julie Bishop and Wilson Tuckey, along with WA Liberal Party president Barry Court.
Protest organiser David Flanagan, who runs a junior Pilbara iron ore company, urged the Prime Minister to engage with the mining industry.
He says the Government's proposal to impose a 40 per cent tax on profits above a 6 per cent threshold will hurt.
"This is not big mining that is down there today. AMEC [Association of Mining and Exploration Companies] represents 170 small mining companies that employ between five and 25 people each," he said.
"We employ a lot of working families and we're not being listened to. So this is our best chance of getting our voice heard.
"We want to talk with the Government. We want to engage with the Government, but what's being proposed is going to take money out of the economy.
"If there's less money in the economy, there's less jobs, there's less projects, there's less taxation ultimately collected and that hurts all Australians."
Difficult talks
Mr Rudd is under pressure from mining companies to compromise on the tax proposal, with a strong push for him to change the definition of a "super profit".
He told the luncheon the Federal Government has got the tax rate correct and will help mining companies with generous transition arrangements.
He also defended the industry consultation process underway.
"I am here to listen. I sat down with folk yesterday. I'm sure I'll sit down with Twiggy [Andrew Forrest] before I leave town and probably others," he said.
"This is a democracy and if there are objections and concerns to aspects of the Government's tax reform proposal, it's good that people have the opportunity to put that sharply and to register their views."
Mr Rudd has promised an extra $2 billion will flow to WA through the Infrastructure Australia Fund.
Earlier he told Fairfax radio that talks over the tax will continue, but will be difficult.
"We are engaged in a continuing consultation with them and that will continue into the days and weeks ahead," he said.
"We think these consultations have been productive - we're learning various things from various companies about their individual circumstances, but this will be a very difficult negotiation."
But Federal Opposition Leader Tony Abbott says it is hard to see what compromises the Government can make.
Mr Abbott says the tax needs to be dropped before it causes more damage.
"The problem with this tax is that he can't change it without destroying his budget strategy and he can't keep it without destroying the resources sector's expansion in this country," he said.
"He's in a very difficult position."
Mr Rudd, meanwhile, says a meeting he had with BHP Billiton head Marius Kloppers in Sydney yesterday was cordial and frank.
"I'm always keen to listen to what the mining industry has to say," Mr Rudd said.
"We had a cordial and frank discussion and I'm sure we'll continue to do that in the future."
Remember we are not financial advisors.. Sampson management Services (SMS) educate and inform only...We are Asset Management Consultants- we teach you about risk and how to measure that risk according to the international standards on Quality, Environment, OHS, and Risk management in an integrated approach. Ref standards:AS/NZS/ISO 9001, AS/NZS/ISO 14001, AS/NZS/ISO 4804, AS/NZS/ISO 4360.
ref http://au.biz.yahoo.com/100609/31/2diqb.html#Scene_1
Wednesday June 9, 2010, 4:09 pm
A 2,000-strong crowd has gathered on Perth's foreshore to protest against the Federal Government's mining super profits tax.
United under the slogan "axe the tax", the protesters rallied outside a hotel where Prime Minister Kevin Rudd addressed a Press Club luncheon.
But Mr Rudd is showing no signs of backing away from his tax reform ahead of his showdown with West Australian mining bosses.
Senior ministers have followed Mr Rudd to the west and will hear first hand what voters think about the tax at a community cabinet meeting this evening.
Mr Rudd will meet Fortescue Metals Group's Andrew Forrest, who has been one of the loudest critics of the tax, ahead of the meeting.
Mr Forrest joined the protesters who included Australia's richest woman, Gina Rhinehart.
She says the time for talking is over.
"Perhaps if there had been negotiations earlier it would have been different, but now the damage to Australia has gone on for too long," she said.
A number of Liberal MPs also attended the protest, including Julie Bishop and Wilson Tuckey, along with WA Liberal Party president Barry Court.
Protest organiser David Flanagan, who runs a junior Pilbara iron ore company, urged the Prime Minister to engage with the mining industry.
He says the Government's proposal to impose a 40 per cent tax on profits above a 6 per cent threshold will hurt.
"This is not big mining that is down there today. AMEC [Association of Mining and Exploration Companies] represents 170 small mining companies that employ between five and 25 people each," he said.
"We employ a lot of working families and we're not being listened to. So this is our best chance of getting our voice heard.
"We want to talk with the Government. We want to engage with the Government, but what's being proposed is going to take money out of the economy.
"If there's less money in the economy, there's less jobs, there's less projects, there's less taxation ultimately collected and that hurts all Australians."
Difficult talks
Mr Rudd is under pressure from mining companies to compromise on the tax proposal, with a strong push for him to change the definition of a "super profit".
He told the luncheon the Federal Government has got the tax rate correct and will help mining companies with generous transition arrangements.
He also defended the industry consultation process underway.
"I am here to listen. I sat down with folk yesterday. I'm sure I'll sit down with Twiggy [Andrew Forrest] before I leave town and probably others," he said.
"This is a democracy and if there are objections and concerns to aspects of the Government's tax reform proposal, it's good that people have the opportunity to put that sharply and to register their views."
Mr Rudd has promised an extra $2 billion will flow to WA through the Infrastructure Australia Fund.
Earlier he told Fairfax radio that talks over the tax will continue, but will be difficult.
"We are engaged in a continuing consultation with them and that will continue into the days and weeks ahead," he said.
"We think these consultations have been productive - we're learning various things from various companies about their individual circumstances, but this will be a very difficult negotiation."
But Federal Opposition Leader Tony Abbott says it is hard to see what compromises the Government can make.
Mr Abbott says the tax needs to be dropped before it causes more damage.
"The problem with this tax is that he can't change it without destroying his budget strategy and he can't keep it without destroying the resources sector's expansion in this country," he said.
"He's in a very difficult position."
Mr Rudd, meanwhile, says a meeting he had with BHP Billiton head Marius Kloppers in Sydney yesterday was cordial and frank.
"I'm always keen to listen to what the mining industry has to say," Mr Rudd said.
"We had a cordial and frank discussion and I'm sure we'll continue to do that in the future."
Remember we are not financial advisors.. Sampson management Services (SMS) educate and inform only...We are Asset Management Consultants- we teach you about risk and how to measure that risk according to the international standards on Quality, Environment, OHS, and Risk management in an integrated approach. Ref standards:AS/NZS/ISO 9001, AS/NZS/ISO 14001, AS/NZS/ISO 4804, AS/NZS/ISO 4360.
Friday, June 4, 2010
the Future fund view
Mega's view is that govt should scrap it and find another way to raise revenues to fix gaping hole in budget. Like add 1% to the GST. That would be acceptable to most people,especially if it was to be for a limited time.
..http://keepminingstrong.posterous.com/rss.xml
Today, June 04, 2010, 3 hours ago
The Future Fund was established to assist Australian governments meet the cost of public sector superannuation liabilities by delivering investment returns on contributions to the Fund.
You can watch the video of the interview here, or read our transcript below.
--
Alan Kohler: Well David, perhaps we can start by asking you your view of the RSPT, the resource super profits tax?
David Murray: You’re probably aware that I made an address at the Australian Papua New Guinea (PNG) Conference in Townsville recently because PNG is going through the process of designing a wealth fund to deal with its oil and gas dividends, taxes and royalties and trying to determine how much should be spent today, essentially, and how much put aside for tomorrow. And you know going through that issue in the context of PNG really makes one consider the pros and cons of this tax regime in Australia. I think the discussion has to be divided into two parts. One is the application of the tax to existing projects and the sovereign risk concerns that the tax brings for Australia, and secondly the design of the tax around the Australian Constitution and the source and flow of funds, whether they’re used for long- term purposes or short-term purposes.
Stephen Bartholomeusz: David, there’s a presumption there that there should be a super tax on mining profits.
DM: No, not necessarily. You’ve got to remember in Australia that states own their land, the resources under the land and have the right to collect royalties on those resources. The Commonwealth has the taxing power and has ownership of its territories and resources outside the coastline. But the Commonwealth has already imposed royalties and the Petroleum Resource Rent Tax (PRRT). The issue here is that the states are not in a very good position to set aside their royalties for longer-term purposes. If the Commonwealth wants to impose a super profits tax on resources activity, then the Commonwealth has to think about when and how that’s used. But that’s why I divide the whole issue into retrospectivity or application to existing projects, on one hand, and the design on the other.
AK: Isn’t there possibly a third element, which is the way that the proposed tax reduces the net present value of future projects because all of the mining companies are now saying that they’re not going to go ahead, or they’re putting future projects on hold, or that there’ll be fewer projects and they’ll be looking at other countries instead of Australia?
DM: Well, the consequence of additional tax is magnified across returns and, you know, that's what they say is technically correct. But the design of this tax has had to be customised to a particular application because of the constitutional position and, in doing that, there are several significant flaws. My view is that the tax has to be changed or abandoned.
AK: Which would you prefer, the change or the abandonment?
DM: Well, it’s conditional. If there’s a change, there has to be some process of putting aside returns from resources depletion for the longer term – and that doesn’t happen in the states and it’s not really happening at the Commonwealth level – and unless we do that, we’ll be directing resource taxes of one sort or another to recurrent spending of government, which will actually cause significant problems later because all resources go through waves of strong returns and weak returns and you’ve got to have a sensible collection of taxes and royalties when returns are strong, but you can’t apply these retrospectively because you won’t get investment.
SB: So, David, what you’re saying is if you’re going to have this kind of tax, the revenue should go into the future fund or a fund like it.
DM: Well, you can do it in a couple of ways.You can dedicate a part of royalties to go into long-term wealth funds, intergenerational funds, or you can direct budget surpluses when the terms of trade are strong and the budget is strong. But in Australia’s case, you’ve got to give some consideration to what happens in the states. If states collect royalties, there should be some incentive to put some of that aside and the reason for that is that it can’t happen as easily elsewhere. For example, the states should not be penalised on their grants from the Commonwealth if they collect significant mining royalties.
AK: Well, the reality is that this sort of revenue will go at least to some extent into recurrent expenditures, so in that case are you saying that this proposal ought to just be abandoned?
DM: Well, if we can’t achieve a design that does not penalise the existing projects – that’s a sovereign risk issue and a design that does not discriminate between recurrent spending and long-term intergenerational wealth creation; if those things can’t be done, the tax should be abandoned.
AK: Right. So, just to be clear on it, you’re saying that it should not apply to existing projects, only future projects and that all the revenue should go into a fund for the future.
DM: No, not all the revenue, but there should be some sensible calculation and debate about what portion of compensation for resource depletion goes into recurrent spending in Australia in total and goes into intergenerational wealth creation.
SB: David, the tax, as it stands, one of its several design features is this 40 per cent credit. You were a banker for decades; if a miner came to you and said will you lend against this IOU from the government, would you do it?
DM: Well, I would be more concerned about that now because of what’s happened with the announcement of this tax. When mining companies go to less developed countries with a poor track record of rule of law and taxation, they generally seek tax standstill arrangements, commitments from government and they also get an acknowledgement of those standstill arrangements from political parties not in government. Traditionally that’s not been regarded as necessary in Australia and I think mining companies, and companies generally, understand that the general rate of company tax can move over time, but it’s the specially structured designer taxes that give rise to additional sovereign risk.
Australia has a good track record on sovereign risk, but if I could just go on a fraction more, Steve, the issue here is that for investors globally, sovereign risk is coming back into the picture as a larger issue because of the massive issuance of sovereign debt around the world post crisis – not just post, but before the crisis and especially during and after. As a consequence of that, investors are becoming a little bit concerned whether governments will become more desperate and impose things that might… that they might not otherwise have done. So, for Australia to do this now is not good timing and if I was a mining company I’d be extremely concerned that tax is being taken off at the top of the cycle. The best thing for Australia to do is to take a component of its corporate taxes that can be attributed to resource depletion and set it aside.
AK: In fact you seem to be suggesting that to some extent the tax is self defeating in that it requires a level of sovereign trust from, in particular, financiers, but the way that it has been introduced actually destroys that trust.
DM: Well, yes, I think it does. And in addition to that, our starting point is a country that needs foreign investment and, notwithstanding all of our success, we still have a current account deficit, you know, and a chronic current account deficit, and that has to end at some time in our history. The worst thing that can happen is that the resources run down, we’re still spending on welfare and we still have a current account deficit. That would be, for future generations, a seriously bad outcome.
AK: So, is the extra sovereign risk that has clearly been identified by other investors around the world, is that affecting or likely to affect the future fund’s asset allocation. You’ve got quite a large allocation to international equities at the moment, in both developed and developing economies, but is that likely to increase at the expense of Australia, given this?
DM: Well, actually the large allocation is not offshore.The large allocation to equities is onshore if you consider the relative scale of Australia’s economy to others, and the reason for that is partly because we have less exchange risk onshore, but partly because we see Australia as a proxy for Asia, including China and India, and their growth. If that proxy principle breaks down, then we would not see as much of a reason to be invested in Australia.
SB: David, if there has to be a tax, do you have a particular design in mind that would be reasonable?
DM: Well, we need a design for new projects starting from exploration up and the one that’s understood is the PRRT. So, in my view, that would be a better structure, but it could not apply to any existing projects or any existing exploration. Bear in mind that the design of this tax makes the Australian taxpayer a mining joint venture and, as a taxpayer, if I am a joint venture in a mine, I’d really want my joint venture partner to be well-resourced enough financially and, in skill terms, to do a good job with the mine. If they are taxed on a basis that does not enable them to do that, then I carry all of the risk of the investment of my tax money and much less upside because if my joint venture partner is not incentivised, then I’m less likely to get the returns. So, I’m not sure if that answered your question directly, but you know when you have to make a designer tax partly for constitutional reasons and partly for current funding, then you get into all sorts of difficulties.
SB: Another design feature of the tax is that it cuts in before the financing costs. A lot of smaller mines in Australia have been project financed. What would be the implications of an RSPT be for project financing in this market?
DM: Well, as you pointed out before, you’re absolutely dependent on the cash flowing from the government and it’s not clear that that will always be the case, especially with the terms of trade and commodity prices. If that changes, then the Australian revenue has got a flow of commitments for existing projects and virtually none of the super profits tax. So the current account cycle would actually deteriorate.
AK: David, there’s now a pretty fiery barney going on between the government and the mining industry. There’s lots of name calling, the government’s now launched a taxpayer-funded advertising campaign against them, how do you feel about that and are you concerned about the consequences of that?
DM: Yes I am. This should be the subject of sensible negotiation behind the scenes. One implication of this advertising war is that a lot of foreign investors see Australia as a place where common sense usually prevails and this sort of public brawl will reduce their confidence in those sorts of things happening. And the difference between us and a lot of countries, with resources, is that we had this reliability; we’ve had a solid rule of law and we’ve had a taxation regime which has been highly predictable.
SB: David, the revenues from this tax, if it were implemented, are designed to bring the budget back into balance three years ahead of the previous schedule. Is that a priority and does it validate the tax?
DM: I think it’s more the implications of the tax. It doesn’t validate it if the tax itself is going to cause you to collect less in the long run, and that’s possible. So, I think that the budgetary issues have got more to do with whether we want loose or easy fiscal policy, in the context of what’s happening with monetary policy, and particularly the household sector indebtedness in Australia. So it only takes very small doses of monetary policy to have a significant effect on consumption and so the budget should be framed in that light. So I think you’ve got to weigh those things up in framing the budget, Steve.
SB: But does it matter that much whether it’s in surplus in three years or four years?
DM: Well, it depends on how you do it and the problem with this tax is it could cause more trouble. It’s a long-term tax being applied to a short-term purpose, really, and that’s where the problems arise.
AK: We’ll have to leave it there. Thanks very much, David.
DM: Thanks, guys.
SB: Thank you, David.
DM: Thank you.
Remember we are not financial advisors.. Sampson management Services (SMS) educate and inform only...We are Asset Management Consultants- we teach you about risk and how to measure that risk according to the international standards on Quality, Environment, OHS, and Risk management in an integrated approach. Ref standards:AS/NZS/ISO 9001, AS/NZS/ISO 14001, AS/NZS/ISO 4804, AS/NZS/ISO 4360.
..http://keepminingstrong.posterous.com/rss.xml
Today, June 04, 2010, 3 hours ago
The Future Fund was established to assist Australian governments meet the cost of public sector superannuation liabilities by delivering investment returns on contributions to the Fund.
You can watch the video of the interview here, or read our transcript below.
--
Alan Kohler: Well David, perhaps we can start by asking you your view of the RSPT, the resource super profits tax?
David Murray: You’re probably aware that I made an address at the Australian Papua New Guinea (PNG) Conference in Townsville recently because PNG is going through the process of designing a wealth fund to deal with its oil and gas dividends, taxes and royalties and trying to determine how much should be spent today, essentially, and how much put aside for tomorrow. And you know going through that issue in the context of PNG really makes one consider the pros and cons of this tax regime in Australia. I think the discussion has to be divided into two parts. One is the application of the tax to existing projects and the sovereign risk concerns that the tax brings for Australia, and secondly the design of the tax around the Australian Constitution and the source and flow of funds, whether they’re used for long- term purposes or short-term purposes.
Stephen Bartholomeusz: David, there’s a presumption there that there should be a super tax on mining profits.
DM: No, not necessarily. You’ve got to remember in Australia that states own their land, the resources under the land and have the right to collect royalties on those resources. The Commonwealth has the taxing power and has ownership of its territories and resources outside the coastline. But the Commonwealth has already imposed royalties and the Petroleum Resource Rent Tax (PRRT). The issue here is that the states are not in a very good position to set aside their royalties for longer-term purposes. If the Commonwealth wants to impose a super profits tax on resources activity, then the Commonwealth has to think about when and how that’s used. But that’s why I divide the whole issue into retrospectivity or application to existing projects, on one hand, and the design on the other.
AK: Isn’t there possibly a third element, which is the way that the proposed tax reduces the net present value of future projects because all of the mining companies are now saying that they’re not going to go ahead, or they’re putting future projects on hold, or that there’ll be fewer projects and they’ll be looking at other countries instead of Australia?
DM: Well, the consequence of additional tax is magnified across returns and, you know, that's what they say is technically correct. But the design of this tax has had to be customised to a particular application because of the constitutional position and, in doing that, there are several significant flaws. My view is that the tax has to be changed or abandoned.
AK: Which would you prefer, the change or the abandonment?
DM: Well, it’s conditional. If there’s a change, there has to be some process of putting aside returns from resources depletion for the longer term – and that doesn’t happen in the states and it’s not really happening at the Commonwealth level – and unless we do that, we’ll be directing resource taxes of one sort or another to recurrent spending of government, which will actually cause significant problems later because all resources go through waves of strong returns and weak returns and you’ve got to have a sensible collection of taxes and royalties when returns are strong, but you can’t apply these retrospectively because you won’t get investment.
SB: So, David, what you’re saying is if you’re going to have this kind of tax, the revenue should go into the future fund or a fund like it.
DM: Well, you can do it in a couple of ways.You can dedicate a part of royalties to go into long-term wealth funds, intergenerational funds, or you can direct budget surpluses when the terms of trade are strong and the budget is strong. But in Australia’s case, you’ve got to give some consideration to what happens in the states. If states collect royalties, there should be some incentive to put some of that aside and the reason for that is that it can’t happen as easily elsewhere. For example, the states should not be penalised on their grants from the Commonwealth if they collect significant mining royalties.
AK: Well, the reality is that this sort of revenue will go at least to some extent into recurrent expenditures, so in that case are you saying that this proposal ought to just be abandoned?
DM: Well, if we can’t achieve a design that does not penalise the existing projects – that’s a sovereign risk issue and a design that does not discriminate between recurrent spending and long-term intergenerational wealth creation; if those things can’t be done, the tax should be abandoned.
AK: Right. So, just to be clear on it, you’re saying that it should not apply to existing projects, only future projects and that all the revenue should go into a fund for the future.
DM: No, not all the revenue, but there should be some sensible calculation and debate about what portion of compensation for resource depletion goes into recurrent spending in Australia in total and goes into intergenerational wealth creation.
SB: David, the tax, as it stands, one of its several design features is this 40 per cent credit. You were a banker for decades; if a miner came to you and said will you lend against this IOU from the government, would you do it?
DM: Well, I would be more concerned about that now because of what’s happened with the announcement of this tax. When mining companies go to less developed countries with a poor track record of rule of law and taxation, they generally seek tax standstill arrangements, commitments from government and they also get an acknowledgement of those standstill arrangements from political parties not in government. Traditionally that’s not been regarded as necessary in Australia and I think mining companies, and companies generally, understand that the general rate of company tax can move over time, but it’s the specially structured designer taxes that give rise to additional sovereign risk.
Australia has a good track record on sovereign risk, but if I could just go on a fraction more, Steve, the issue here is that for investors globally, sovereign risk is coming back into the picture as a larger issue because of the massive issuance of sovereign debt around the world post crisis – not just post, but before the crisis and especially during and after. As a consequence of that, investors are becoming a little bit concerned whether governments will become more desperate and impose things that might… that they might not otherwise have done. So, for Australia to do this now is not good timing and if I was a mining company I’d be extremely concerned that tax is being taken off at the top of the cycle. The best thing for Australia to do is to take a component of its corporate taxes that can be attributed to resource depletion and set it aside.
AK: In fact you seem to be suggesting that to some extent the tax is self defeating in that it requires a level of sovereign trust from, in particular, financiers, but the way that it has been introduced actually destroys that trust.
DM: Well, yes, I think it does. And in addition to that, our starting point is a country that needs foreign investment and, notwithstanding all of our success, we still have a current account deficit, you know, and a chronic current account deficit, and that has to end at some time in our history. The worst thing that can happen is that the resources run down, we’re still spending on welfare and we still have a current account deficit. That would be, for future generations, a seriously bad outcome.
AK: So, is the extra sovereign risk that has clearly been identified by other investors around the world, is that affecting or likely to affect the future fund’s asset allocation. You’ve got quite a large allocation to international equities at the moment, in both developed and developing economies, but is that likely to increase at the expense of Australia, given this?
DM: Well, actually the large allocation is not offshore.The large allocation to equities is onshore if you consider the relative scale of Australia’s economy to others, and the reason for that is partly because we have less exchange risk onshore, but partly because we see Australia as a proxy for Asia, including China and India, and their growth. If that proxy principle breaks down, then we would not see as much of a reason to be invested in Australia.
SB: David, if there has to be a tax, do you have a particular design in mind that would be reasonable?
DM: Well, we need a design for new projects starting from exploration up and the one that’s understood is the PRRT. So, in my view, that would be a better structure, but it could not apply to any existing projects or any existing exploration. Bear in mind that the design of this tax makes the Australian taxpayer a mining joint venture and, as a taxpayer, if I am a joint venture in a mine, I’d really want my joint venture partner to be well-resourced enough financially and, in skill terms, to do a good job with the mine. If they are taxed on a basis that does not enable them to do that, then I carry all of the risk of the investment of my tax money and much less upside because if my joint venture partner is not incentivised, then I’m less likely to get the returns. So, I’m not sure if that answered your question directly, but you know when you have to make a designer tax partly for constitutional reasons and partly for current funding, then you get into all sorts of difficulties.
SB: Another design feature of the tax is that it cuts in before the financing costs. A lot of smaller mines in Australia have been project financed. What would be the implications of an RSPT be for project financing in this market?
DM: Well, as you pointed out before, you’re absolutely dependent on the cash flowing from the government and it’s not clear that that will always be the case, especially with the terms of trade and commodity prices. If that changes, then the Australian revenue has got a flow of commitments for existing projects and virtually none of the super profits tax. So the current account cycle would actually deteriorate.
AK: David, there’s now a pretty fiery barney going on between the government and the mining industry. There’s lots of name calling, the government’s now launched a taxpayer-funded advertising campaign against them, how do you feel about that and are you concerned about the consequences of that?
DM: Yes I am. This should be the subject of sensible negotiation behind the scenes. One implication of this advertising war is that a lot of foreign investors see Australia as a place where common sense usually prevails and this sort of public brawl will reduce their confidence in those sorts of things happening. And the difference between us and a lot of countries, with resources, is that we had this reliability; we’ve had a solid rule of law and we’ve had a taxation regime which has been highly predictable.
SB: David, the revenues from this tax, if it were implemented, are designed to bring the budget back into balance three years ahead of the previous schedule. Is that a priority and does it validate the tax?
DM: I think it’s more the implications of the tax. It doesn’t validate it if the tax itself is going to cause you to collect less in the long run, and that’s possible. So, I think that the budgetary issues have got more to do with whether we want loose or easy fiscal policy, in the context of what’s happening with monetary policy, and particularly the household sector indebtedness in Australia. So it only takes very small doses of monetary policy to have a significant effect on consumption and so the budget should be framed in that light. So I think you’ve got to weigh those things up in framing the budget, Steve.
SB: But does it matter that much whether it’s in surplus in three years or four years?
DM: Well, it depends on how you do it and the problem with this tax is it could cause more trouble. It’s a long-term tax being applied to a short-term purpose, really, and that’s where the problems arise.
AK: We’ll have to leave it there. Thanks very much, David.
DM: Thanks, guys.
SB: Thank you, David.
DM: Thank you.
Remember we are not financial advisors.. Sampson management Services (SMS) educate and inform only...We are Asset Management Consultants- we teach you about risk and how to measure that risk according to the international standards on Quality, Environment, OHS, and Risk management in an integrated approach. Ref standards:AS/NZS/ISO 9001, AS/NZS/ISO 14001, AS/NZS/ISO 4804, AS/NZS/ISO 4360.
Thursday, June 3, 2010
xstrata cancells projects
article form todays "The Australian"
KEVIN Rudd is refusing to budge on his super-profits tax after global miner Xstrata suspended $586 million worth of investment in Queensland yesterday, threatening 3250 jobs and triggering calls from Premier Anna Bligh and mining, business and union leaders to start genuine talks and compromise.
The sudden announcement to suspend further investment on the Wandoan thermal coal project and the Ernest Henry copper mine because of the fears over the resource super-profits tax dramatically increased the stakes in the tax war between the Rudd government and the miners because jobs are now at risk.
"Those people who got job termination notices today, this is no longer a war of words," Ms Bligh said yesterday. "This is causing real pain to Queensland families."
Xstrata yesterday cancelled 60 contract jobs after immediately suspending a $400m underground expansion of the Ernest Henry copper mine in northwest Queensland. It had planned to employ 190 people on the project. About $186m worth of work on the $6bn Wandoan mine and other coal projects in the centre of the state have also been suspended. Xstrata said the two projects would have created 3250 jobs, which were now "at risk".
Start of sidebar. Skip to end of sidebar.
Related CoverageTRADE: Minerals drive surplus
XSTRATA: Numbers don't add up for employees
HENRY ERGAS: Going retro with cash grab
IN DEPTH: Henry Tax Review
Rudd's claws out on mining tax Courier Mail, 1 hour ago
Rudd wrong on $6bn venture: Xstrata The Australian, 4 hours ago
Don't believe miners on tax, PM warns The Australian, 5 hours ago
Tax 'will cost Queensland $2.5bn' Courier Mail, 6 hours ago
Xstrata in warning over $6bn coal project Daily Telegraph, 8 hours ago
.End of sidebar. Return to start of sidebar.
Xstrata Coal chief executive Peter Freyberg said the decision was difficult. "This is devastating for the people involved, teams of people I have had working on it for several years - to have that all blown away as a result of a tax we have not seen, where the numbers and the models used is inappropriate for our industry is highly problematic," he said.
The mining sector is running a campaign against the tax and has delayed billions of dollars worth of projects. Yesterday's announcement was the first to directly affect mining jobs, although the tax is also affecting the value of mining companies listed on the stock exchange and held by investors, including superannuation funds.
One of the world's biggest resource fund managers revealed yesterday it had sold down a quarter of its BHP and Rio Tinto holdings because of the proposed tax.
JPMorgan Chase's Ian Henderson said Rio had been his biggest investment, about 4.5 per cent of the $US7 billion ($8.2bn) of resource assets under his control, but he had reduced his holding by about $US100 million. He also made a "reasonably significant" reduction in his holdings of iron ore miner Fortescue, but the JPMorgan funds had increased their stakes in goldminers.
"I'm sorry to say we've reduced our Australian exposure," Mr Henderson told Bloomberg. "I had not thought that the changes in Australia would be quite as drastic as they are proposed to be."
JPMorgan's chairman in Australia and New Zealand is Rod Eddington, a Rio director who this week added his voice to calls for the Prime Minister to restart negotiations with the industry.
Although Mr Rudd declared the government would not be pushed around by the industry, he said he was listening to calls for changes in negotiations for the tax. And Resources Minister Martin Ferguson said the mining companies and the government now agreed the debate was really about "how much tax is collected, how it's collected and who collects it".
Ms Bligh called for the Rudd government and miners to "get on with solving" the dispute over the 40 per cent tax on resource super profits. "I would urge both the federal government and the mining companies to get around the table, put down the baseball bats, stop the advertising and get on with solving it," she said. Australian Workers Union leader Paul Howes, whose union has funded advertising supporting the tax and attacking mining industry bosses, said last night Xstrata was a "good employer" but on this occasion, "I smell a rat and think they may have been led into an ideological argument". "It's a pretty ugly move and I don't believe it's because of the RSPT," Mr Howes said.
But he said it would be best for both sides to negotiate in "a cool and calm atmosphere".
"There's a case for everyone to take a step back and have some proper negotiations," he said.
Last night, Mr Freyberg slapped down the suggestion that suspension of the Queensland projects was a tactical ploy by the company in the mining industry's campaign against the tax. He said that after crunching the numbers on the tax, Xstrata had concluded that net profit from the new mine at Wandoan would fall from nearly $500m to "near zero".
Xstrata chief executive Mick Davis said the tax had "created significant uncertainty for the future of mining investment into Australia and would impair the value of previously approved projects and exploration to the point that continued investment can no longer be justified".
BHP Billiton chief executive Marius Kloppers also called last night for the government to change the terms of negotiations to avoid "massive unintended consequences" of the mining tax.
Infrastructure Australia head Rod Eddington, who advises the Prime Minister; the chairman of Qantas, Leigh Clifford; and the Business Council of Australia have also called on the government to enter serious negotiations on the new tax.
But Mr Rudd told parliament the government would not be bullied. "This government will not be intimidated by the statements of any mining company, foreign or domestic," he said, accusing the opposition of taking funding from the industry. "This government does not stand here as the puppet of parts of the mining industry, as those opposite do; this government stands here to act in the national interest on behalf of all Australians."
Remember we are not financial advisors.. Sampson management Services (SMS) educate and inform only...We are Asset Management Consultants- we teach you about risk and how to measure that risk according to the international standards on Quality, Environment, OHS, and Risk management in an integrated approach. Ref standards:AS/NZS/ISO 9001, AS/NZS/ISO 14001, AS/NZS/ISO 4804, AS/NZS/ISO 4360.
KEVIN Rudd is refusing to budge on his super-profits tax after global miner Xstrata suspended $586 million worth of investment in Queensland yesterday, threatening 3250 jobs and triggering calls from Premier Anna Bligh and mining, business and union leaders to start genuine talks and compromise.
The sudden announcement to suspend further investment on the Wandoan thermal coal project and the Ernest Henry copper mine because of the fears over the resource super-profits tax dramatically increased the stakes in the tax war between the Rudd government and the miners because jobs are now at risk.
"Those people who got job termination notices today, this is no longer a war of words," Ms Bligh said yesterday. "This is causing real pain to Queensland families."
Xstrata yesterday cancelled 60 contract jobs after immediately suspending a $400m underground expansion of the Ernest Henry copper mine in northwest Queensland. It had planned to employ 190 people on the project. About $186m worth of work on the $6bn Wandoan mine and other coal projects in the centre of the state have also been suspended. Xstrata said the two projects would have created 3250 jobs, which were now "at risk".
Start of sidebar. Skip to end of sidebar.
Related CoverageTRADE: Minerals drive surplus
XSTRATA: Numbers don't add up for employees
HENRY ERGAS: Going retro with cash grab
IN DEPTH: Henry Tax Review
Rudd's claws out on mining tax Courier Mail, 1 hour ago
Rudd wrong on $6bn venture: Xstrata The Australian, 4 hours ago
Don't believe miners on tax, PM warns The Australian, 5 hours ago
Tax 'will cost Queensland $2.5bn' Courier Mail, 6 hours ago
Xstrata in warning over $6bn coal project Daily Telegraph, 8 hours ago
.End of sidebar. Return to start of sidebar.
Xstrata Coal chief executive Peter Freyberg said the decision was difficult. "This is devastating for the people involved, teams of people I have had working on it for several years - to have that all blown away as a result of a tax we have not seen, where the numbers and the models used is inappropriate for our industry is highly problematic," he said.
The mining sector is running a campaign against the tax and has delayed billions of dollars worth of projects. Yesterday's announcement was the first to directly affect mining jobs, although the tax is also affecting the value of mining companies listed on the stock exchange and held by investors, including superannuation funds.
One of the world's biggest resource fund managers revealed yesterday it had sold down a quarter of its BHP and Rio Tinto holdings because of the proposed tax.
JPMorgan Chase's Ian Henderson said Rio had been his biggest investment, about 4.5 per cent of the $US7 billion ($8.2bn) of resource assets under his control, but he had reduced his holding by about $US100 million. He also made a "reasonably significant" reduction in his holdings of iron ore miner Fortescue, but the JPMorgan funds had increased their stakes in goldminers.
"I'm sorry to say we've reduced our Australian exposure," Mr Henderson told Bloomberg. "I had not thought that the changes in Australia would be quite as drastic as they are proposed to be."
JPMorgan's chairman in Australia and New Zealand is Rod Eddington, a Rio director who this week added his voice to calls for the Prime Minister to restart negotiations with the industry.
Although Mr Rudd declared the government would not be pushed around by the industry, he said he was listening to calls for changes in negotiations for the tax. And Resources Minister Martin Ferguson said the mining companies and the government now agreed the debate was really about "how much tax is collected, how it's collected and who collects it".
Ms Bligh called for the Rudd government and miners to "get on with solving" the dispute over the 40 per cent tax on resource super profits. "I would urge both the federal government and the mining companies to get around the table, put down the baseball bats, stop the advertising and get on with solving it," she said. Australian Workers Union leader Paul Howes, whose union has funded advertising supporting the tax and attacking mining industry bosses, said last night Xstrata was a "good employer" but on this occasion, "I smell a rat and think they may have been led into an ideological argument". "It's a pretty ugly move and I don't believe it's because of the RSPT," Mr Howes said.
But he said it would be best for both sides to negotiate in "a cool and calm atmosphere".
"There's a case for everyone to take a step back and have some proper negotiations," he said.
Last night, Mr Freyberg slapped down the suggestion that suspension of the Queensland projects was a tactical ploy by the company in the mining industry's campaign against the tax. He said that after crunching the numbers on the tax, Xstrata had concluded that net profit from the new mine at Wandoan would fall from nearly $500m to "near zero".
Xstrata chief executive Mick Davis said the tax had "created significant uncertainty for the future of mining investment into Australia and would impair the value of previously approved projects and exploration to the point that continued investment can no longer be justified".
BHP Billiton chief executive Marius Kloppers also called last night for the government to change the terms of negotiations to avoid "massive unintended consequences" of the mining tax.
Infrastructure Australia head Rod Eddington, who advises the Prime Minister; the chairman of Qantas, Leigh Clifford; and the Business Council of Australia have also called on the government to enter serious negotiations on the new tax.
But Mr Rudd told parliament the government would not be bullied. "This government will not be intimidated by the statements of any mining company, foreign or domestic," he said, accusing the opposition of taking funding from the industry. "This government does not stand here as the puppet of parts of the mining industry, as those opposite do; this government stands here to act in the national interest on behalf of all Australians."
Remember we are not financial advisors.. Sampson management Services (SMS) educate and inform only...We are Asset Management Consultants- we teach you about risk and how to measure that risk according to the international standards on Quality, Environment, OHS, and Risk management in an integrated approach. Ref standards:AS/NZS/ISO 9001, AS/NZS/ISO 14001, AS/NZS/ISO 4804, AS/NZS/ISO 4360.
Saturday, May 29, 2010
50% dropin commodities in next 12 months?
better than a month ago??
reference http://www.abc.net.au/insidebusiness
Europe debt fears lessen
Broadcast: 30/05/2010
ALAN KOHLER, PRESENTER: If it wasn’t so serious the tussle between bulls and bears might be entertaining.
This week was another great contest with fortunes swinging wildly. To get a sense of where the European debt crisis may be heading I turned to man who saw it coming, co-founder of the Magellan Financial Group, Hamish Douglass.
Well Hamish, when you were on the program in December you said that there'd be no free lunch for all the policies, the stimulus, that was introduced to save the world from the GFC (Global Financial Crisis) in 2008 and you predicted that there'd be a price to pay in eighteen months to two years. So is it just happening earlier than you thought or is there still another one to come?
HAMISH DOUGLASS, CEO, MAGELLAN FINANCIAL GROUP: Well, in Europe it's certainly happening probably a bit earlier than we thought, with the sovereign debt crisis in Europe, and I think that's really highlighted the fiscal positions the Governments got themselves into. So it just wasn't consumer indebtedness; it's now Government indebtedness around the world. So Europe has brought that to the forefront.
Not that we're concerned that Europe's about to collapse, a systemic collapse. We may have been four weeks ago as this was playing itself out, but they're now having to respond to that risk. America is probably going to go through still a recovery and we're still probably about twelve months away from some of the issues we were talking about in America.
So it's arrived earlier in Europe. I think we're probably still twelve months away from that scenario in America. I think we're going to have quite ...
ALAN KOHLER: But what's the risk of contagion from Europe to America and Japan? I mean, when you were here in December you were talking about Europe, America and Japan and the debt problems in those places.
HAMISH DOUGLASS: Well, ultimately the risk of contagion is very high when you have an event like this that's going on in Europe at the moment. And a lot of people were commentating, you know, Greece is a very small country, what this is all about. And I sort of say, what short memories people have. You know, Lehmann Brothers was a relatively small investment bank that nearly brought down the entire world's financial system. And should Greece been allowed to have gone bankrupt last Wednesday, without a rescue package, I think we were in a very, very similar situation to what we were with Lehmann Brothers and of course that spread globally. So the contagion risk is very high.
ALAN KOHLER: But now everyone's attention is turning to Spain and possibly Portugal and even the UK. I mean, OK, Greece is looked after. What about the rest?
HAMISH DOUGLASS: That's why they needed a very large response program and they've announced a 750 billion euro program to effectively provide liquidity to those other nations. The problem we have is it's not actually in place at the moment. It's just a proposal. It's been approved by the German parliament last Friday, very importantly, but ultimately this has to be put in place.
It's our estimate that about a trillion euros is about large enough to meet the funding requirements of the most-at-risk sovereign nations in Europe over the next three years. So we think they've got that package size about right. That's why we're sort of more optimistic than we were three weeks ago. But it's not in place at the moment and let's see the detail and there may well, I think, we're going to have jittery markets over the next month or so as we actually see the details of this sort of package get put in place. If it's not put in place then I think we really have to hold onto our chairs.
ALAN KOHLER: Well in fact the markets are very volatile. They soared at the end of this week. So how do you see ... is the volatility a sign of vulnerability?
HAMISH DOUGLASS: I think it's a sign of a few things. I think four weeks ago, most people didn't even really see this as a risk and suddenly when you announce programs of this scale and you have the Federal Reserve stepping in and you have Germany banning short selling again, suddenly people are going, 'oh my goodness there must be something really wrong here'. And I think that has really spooked people and now people are starting to focus on the policy actions and they're actually starting to look at the data of some of these countries and it's not a pretty picture.
ALAN KOHLER: So to clarify, where do you stand? I mean, are you saying that the risk has passed or are we still hostage to events?
HAMISH DOUGLASS: Four weeks ago we started cashing in on our portfolios and taking action to really protect ourselves because we saw this moving in a very ugly direction in Europe and we were very concerned about the contagion risk you spoke about and we could have had a full-blown banking crisis on our hands, not just a sovereign debt crisis, but a banking crisis in Europe that could have rapidly spread around the world.
Today we are more relaxed on that issue because we think that the German, the French government and the US government has got the totality of this problem and they've announced a package and the ECB (European Central Bank) and the Federal Reserve has come in with sufficient force that we think if it gets put in place, which we think it will, will actually put a firewall around the issue. That doesn't mean Europe's a wonderfully happy place to be. I think they've got some very tough issues over the next three to five years. But the risk of the whole banking system collapsing in Europe, which was our primary concern, I think that risk is dissipating and we were on red alert four weeks ago on that issue.
ALAN KOHLER: Commodity prices fell 15 per cent in May, not only because of Europe, but also because of the sense that there was going to be a slowdown in China. So what's your view about the outlook for commodities?
HAMISH DOUGLASS: Well, my view on the outlook for commodities when you add China which I think unless the authorities in China are going to keep going on with the policy of expanding credit and investing ahead of the curve in fixed assets, I think it's inevitable in the next 18 months you're going to have a slowdown. Plus Europe is, they've got austerity measures, it's going to further slow the European economy.
It's very hard to gauge, but I wouldn't be surprised that in the next 12 or so months to actually see commodity prices fall very dramatically. And I would say maybe a 50 per cent fall in commodity prices wouldn't be unrealistic in that scenario, which I think is pretty likely, not assured, but I think it's pretty likely. Look, out two or three years I'm not nervous about commodities. I just think we're in a confluence of events of China having to invoke policies to stop a big problem occurring and Europe slowing down.
ALAN KOHLER: Thanks for joining us, Hamish.
HAMISH DOUGLASS: My pleasure.
Remember we are not financial advisors.. Sampson management Services (SMS) educate and inform only...We are Asset Management Consultants- we teach you about risk and how to measure that risk according to the international standards on Quality, Environment, OHS, and Risk management in an integrated approach. Ref standards:AS/NZS/ISO 9001, AS/NZS/ISO 14001, AS/NZS/ISO 4804, AS/NZS/ISO 4360.
reference http://www.abc.net.au/insidebusiness
Europe debt fears lessen
Broadcast: 30/05/2010
ALAN KOHLER, PRESENTER: If it wasn’t so serious the tussle between bulls and bears might be entertaining.
This week was another great contest with fortunes swinging wildly. To get a sense of where the European debt crisis may be heading I turned to man who saw it coming, co-founder of the Magellan Financial Group, Hamish Douglass.
Well Hamish, when you were on the program in December you said that there'd be no free lunch for all the policies, the stimulus, that was introduced to save the world from the GFC (Global Financial Crisis) in 2008 and you predicted that there'd be a price to pay in eighteen months to two years. So is it just happening earlier than you thought or is there still another one to come?
HAMISH DOUGLASS, CEO, MAGELLAN FINANCIAL GROUP: Well, in Europe it's certainly happening probably a bit earlier than we thought, with the sovereign debt crisis in Europe, and I think that's really highlighted the fiscal positions the Governments got themselves into. So it just wasn't consumer indebtedness; it's now Government indebtedness around the world. So Europe has brought that to the forefront.
Not that we're concerned that Europe's about to collapse, a systemic collapse. We may have been four weeks ago as this was playing itself out, but they're now having to respond to that risk. America is probably going to go through still a recovery and we're still probably about twelve months away from some of the issues we were talking about in America.
So it's arrived earlier in Europe. I think we're probably still twelve months away from that scenario in America. I think we're going to have quite ...
ALAN KOHLER: But what's the risk of contagion from Europe to America and Japan? I mean, when you were here in December you were talking about Europe, America and Japan and the debt problems in those places.
HAMISH DOUGLASS: Well, ultimately the risk of contagion is very high when you have an event like this that's going on in Europe at the moment. And a lot of people were commentating, you know, Greece is a very small country, what this is all about. And I sort of say, what short memories people have. You know, Lehmann Brothers was a relatively small investment bank that nearly brought down the entire world's financial system. And should Greece been allowed to have gone bankrupt last Wednesday, without a rescue package, I think we were in a very, very similar situation to what we were with Lehmann Brothers and of course that spread globally. So the contagion risk is very high.
ALAN KOHLER: But now everyone's attention is turning to Spain and possibly Portugal and even the UK. I mean, OK, Greece is looked after. What about the rest?
HAMISH DOUGLASS: That's why they needed a very large response program and they've announced a 750 billion euro program to effectively provide liquidity to those other nations. The problem we have is it's not actually in place at the moment. It's just a proposal. It's been approved by the German parliament last Friday, very importantly, but ultimately this has to be put in place.
It's our estimate that about a trillion euros is about large enough to meet the funding requirements of the most-at-risk sovereign nations in Europe over the next three years. So we think they've got that package size about right. That's why we're sort of more optimistic than we were three weeks ago. But it's not in place at the moment and let's see the detail and there may well, I think, we're going to have jittery markets over the next month or so as we actually see the details of this sort of package get put in place. If it's not put in place then I think we really have to hold onto our chairs.
ALAN KOHLER: Well in fact the markets are very volatile. They soared at the end of this week. So how do you see ... is the volatility a sign of vulnerability?
HAMISH DOUGLASS: I think it's a sign of a few things. I think four weeks ago, most people didn't even really see this as a risk and suddenly when you announce programs of this scale and you have the Federal Reserve stepping in and you have Germany banning short selling again, suddenly people are going, 'oh my goodness there must be something really wrong here'. And I think that has really spooked people and now people are starting to focus on the policy actions and they're actually starting to look at the data of some of these countries and it's not a pretty picture.
ALAN KOHLER: So to clarify, where do you stand? I mean, are you saying that the risk has passed or are we still hostage to events?
HAMISH DOUGLASS: Four weeks ago we started cashing in on our portfolios and taking action to really protect ourselves because we saw this moving in a very ugly direction in Europe and we were very concerned about the contagion risk you spoke about and we could have had a full-blown banking crisis on our hands, not just a sovereign debt crisis, but a banking crisis in Europe that could have rapidly spread around the world.
Today we are more relaxed on that issue because we think that the German, the French government and the US government has got the totality of this problem and they've announced a package and the ECB (European Central Bank) and the Federal Reserve has come in with sufficient force that we think if it gets put in place, which we think it will, will actually put a firewall around the issue. That doesn't mean Europe's a wonderfully happy place to be. I think they've got some very tough issues over the next three to five years. But the risk of the whole banking system collapsing in Europe, which was our primary concern, I think that risk is dissipating and we were on red alert four weeks ago on that issue.
ALAN KOHLER: Commodity prices fell 15 per cent in May, not only because of Europe, but also because of the sense that there was going to be a slowdown in China. So what's your view about the outlook for commodities?
HAMISH DOUGLASS: Well, my view on the outlook for commodities when you add China which I think unless the authorities in China are going to keep going on with the policy of expanding credit and investing ahead of the curve in fixed assets, I think it's inevitable in the next 18 months you're going to have a slowdown. Plus Europe is, they've got austerity measures, it's going to further slow the European economy.
It's very hard to gauge, but I wouldn't be surprised that in the next 12 or so months to actually see commodity prices fall very dramatically. And I would say maybe a 50 per cent fall in commodity prices wouldn't be unrealistic in that scenario, which I think is pretty likely, not assured, but I think it's pretty likely. Look, out two or three years I'm not nervous about commodities. I just think we're in a confluence of events of China having to invoke policies to stop a big problem occurring and Europe slowing down.
ALAN KOHLER: Thanks for joining us, Hamish.
HAMISH DOUGLASS: My pleasure.
Remember we are not financial advisors.. Sampson management Services (SMS) educate and inform only...We are Asset Management Consultants- we teach you about risk and how to measure that risk according to the international standards on Quality, Environment, OHS, and Risk management in an integrated approach. Ref standards:AS/NZS/ISO 9001, AS/NZS/ISO 14001, AS/NZS/ISO 4804, AS/NZS/ISO 4360.
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