Coming up in today's show:
- An utterly irrelevant round-up of overnight market
noiseaction featuring loads of incomprehensible graphs that you will forget as soon as you've finished your weetbix...
- A leading (OK, they're all 'leading') market economist issues a forecast on interest rates that is a 180 degree turnaround from what he said a week ago and 360 degrees from two weeks back...
"Thanks Rick! Wall Street soared/sailed/shone overnight on promises of continued low interest rates , a day after swooning/sinking/slipping on fears of rising ones. Banks and miners led/drove/ the gains, a day after driving/leading the falls. Our dollar went along for the ride, accelerating/advancing/ascending after the previous day dropping/drooping/descending, while bond yields plummeted/parachuted/pirouetted lower after earlier perking/picking/piling up. The futures market suggests local shares today will strengthen/rebound/surge/flourish, but traders warn this will depend on the RBA cutting/slashing/trimming/lowering cash rates to stimulate/boost/buttress/promote activity. Also, say something here about the carbon tax destroying/decimating/damaging our future. Sorry, Rick, I can't read/decipher/translate my notes. I got the quote from a broker at a facility/establishment/the pub last night."
Thanks anyway Kirsty. And thanks Mr Roget. That carbon tax sure has a lot to answer for, which brings me to my second guest, Shadow Treasurer Joe Hockey. Joe, thanks for joining us. Has Australia become a sovereign risk?
"Well, let me put it this way, Rick, the All Ordinaries was 10 per cent above today's levels when the government unleashed the carbon tax on us. So it's gotta be hurting. And that's mums' and dads' super money."
But, Joe, every other market is down as well isn't it? And the carbon tax doesn't actually start till a year from now.
"Well, yes, and that just tells you the whole world is worried about this tax."
"Let's talk about inflation....I want to ask you...."
(Hockey pulls out piece of paper from suit pocket). "Yes, inflation. In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time."
"We know that, Joe. But the market is saying the next move in rates will be down. Doesn't that suggest inflation is not a problem?"
"Not now. What it means ,Rick, is that this government is driving the economy into the ground with its carbon tax, which will force prices up."
"But you just said inflation isn't a problem. Growth is."
"No what I said was that people's lives and businesses are being thrown on the scrap heap because of the carbon tax."
"But the unemployment rate is at its lowest level on record."
"Yes, but that means wages will spiral out of control, inflation will surge, interest rates will soar/rocket/accelerate/take off (Kirsty, can you throw me the Roget......thanks) and the government will be in the dock for destroying our sacred Aussie way of life."
"Yes, but you said inflation isn't a problem."
"No, what I said, Rick, is that the whole world is watching Australia right now and not liking what it sees. Forget that the Euro is coming apart. Forget that the US has been downgraded. Forget that London is in flames. The whole world is watching us and thinking we have gone stark raving crazy over this tax on a weightless gas. I mean seriously...it would be funny if it wasn't so....so....serious."
"But Australia will be a sovereign risk, Rick. Mark my words. Tony Abbott and I will do everything to ensure it is. We're off to New York next week to tell hedge funds that their money is no longer safe in our banks. And then we're gonna to leak to the Herald Sun and the Daily Telegraph that the government plans to tax the family home and then we're gonna block supply in the Senate and then...."
Thanks Joe. Unfortunately that's all we've got time for. We'll return in a moment with a forecast for today's markets that will be out of date by the time the next segment begins. And we'll have broker Rock Digger with his tips for three mining stocks to get you through till the next margin call. But first a word from our sponsor, Rio Tinto.....