Macquarie Group expects big falls in contract iron ore prices in 2009 going by what speakers had to say at the Macquarie China conference. Despite the bleak research, iron ore stocks are outperforming – BHP up 4.5%, RIO up 4% and FMG up 5.1%.
Other News :The world is waiting on who will be the next President of the US – Barrack Obama remains the favourite.
BAD NEWS keeps coming in
- Allco Finance Group (AFG) has called in the receivers. Commonwealth Bank seems to be the most exposed among the major banks.
- Babcock & Brown Infrastructure Group (BBI) announced it will suspend payment of distributions and defer dividends until further notice.
- Bendigo and Adelaide Bank(BEN) has withdrawn its $75m convertible preference share offer due to deteriorating market conditions
- The Australian and the AFR both suggest ABC Learning (ABS) is thinking about calling in the receivers having failed to re-negotiate loans with banks. The CBA is the main lender according to the AFR with $500m thought to be outstanding
Mcain the robot
The Australian government has released its economic forecasts for 2008-09.
Various economists are already labeling it far too optimistic. It expects 2008-09 GDP growth of 2%, above expectations of 1.8%; predicts unemployment of 5% by mid-2009 compared to 4.3% at the moment; inflation to be at 3.5% by mid-2009 and the 2008-09 budget surplus forecasts has been trimmed back to $5.4bn. NAB economists have labeled the outlook as “too optimistic by a long way”.