[LINK] The Community of - was A good time to short

Tom Koltai tomk at unwired.com.au
Sat May 2 15:41:28 EST 2009


> -----Original Message-----
> From: Grant McHerron [mailto:grant at apc.org.au] 
> Sent: Saturday, 2 May 2009 1:11 PM
> To: Tom Koltai
> Cc: linda at databasics.com.au; 'link'
> Subject: RE: [LINK] The Community of - was A good time to short
> 
> 
> 
> On Sat, 2009-05-02 at 11:08 +1000, Tom Koltai wrote:
> > Actually Grant, you are quite correct. I should give more of a hint.
<Snip>
> > One I referred to in my weekend notes.
> > The other one I shall have to put down to cyclical 
> financial curves, 
> > astrology and Koltai voodoo.
> 
> See - now that's MUCH better - now we've got something 
> tangible to ponder rather than watching the neighbour run 
> around his back yard yelling in his shorts...
> 
> What are your weekend notes? Is this a website somewhere? Did 
> I miss an email or something? Sorry - been lurking but not 
> always able to read. 

Sorry Weekend Snippets......
Link Posting yesterday from Tom Koltai - starts off:

"We want to respect their sovereignty, but we also recognize that we
have huge strategic interests, huge national security interests in
making sure that Pakistan is stable and that you don't end up having a
nuclear-armed militant state
<http://www.thenews.com.pk/top_story_detail.asp?Id=21844> ."

> Oh, in other news, did you note that the US car market is 
> down 34% - ack! No wonder the Australian government is 
> finally waking up and has started to say "We can't rely on 
> the USA to protect us" :)
> 

The real problem at the moment is that the Australian numbers are due
out soon and we seem to be in arrears to the tune of 4-7% of our
estimated GDP this year -  which equals a short fall of 35-70 billion
deficit.

And it might be why the govenrment echoed the US Governments urging to
"Buy up" two weeks of groceries.....
(A country wide "larder filling" exercise will add about 6.8% to our 2nd
quarter figures [retail sector] - softening the real situation.)

When pro Liberal analysts (uncle rupert) of the media compare the
current deficit to last years surplus (20 billion plus) then Australians
might understand why our prime Minister is looking so favourably at the
Rio Tinto deal.

Unfortunately - selling off chunks of our future for short term
political or fincial gain is never a good way to balance the books.

I blogged about this earlier this year..... Is Australia the Worlds Last
Bastion of Economic Stability ? 
http://www.perceptric.com/blog/_archives/2009/1/19/4061546.html

In which I said a few things - but specifically in relation to the Rio
Tinto current leanings I said:

Lets talk about our Mineral Industry again.
We mine it - thousand of tons every year.

Unfortunately, we don't smelt it, beat it, form it, mold it or do
anything else to it (very much) except to load it all in ships and send
it overseas and say - gee that was a good year.

In economics, a business that behaves in this manner is never given a
twelve year business plan - we just draft a five year plan and suggest
they show the shareholders the three year plan.
The term is referred to as the Theory of diminishing economic returns.
To maintain the Purchase Price Parity of our dollar, as our population
grows we have to export more raw materials to achieve the same GDP
balancing act result.

Is there something wrong with our labour force.

Do we lack people that want jobs ?

No - we just have politicians that listen to their lobbyist advisors who
are on the payroll of the corporations that want the fast returns
because their Directors want the bonuses this year because by the year
after next, when they put themselves up for re-election, they may not
get voted in again.

Foreign Trade is a complicated business. Between a healthy happy country
and poverty "are only a few that prevent the rest of us from getting so
much".

The idea of raping the resources to provide an immediate shareholder
profit is not a long term winner.
Real Wealth can never be created by reselling at a set margin someone
else's produce.

That methodology merely intercepts and adds GST to a fiscal opportunity.

Real wealth can only be created by manufacturing.
-----------------

In conclusion the idea that the Rio Tinto sell-off can in any way
balance the books in Oz beyond the current political poll season is
ridiculous.

Kevin, if you're reading - forget the Rio deal - unless it has with it
at least 100,000 jobs for Aussies making copper tube, alumium finished
rods all of which will be shipped on australian ships crewed by only
australian crew - and paid for in Euros or SDR's - not US dollars.

Then and only then would I say that a good deal has been done for
Australia.

And don't worry abnout making yourself unpopular now - the elections are
srtill some way off. Make the unpopular decisions now..... It will pay
off handsomely in wealth creation within our borders.


Tom


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