The All Ords are down 665 points, or 14%, from a year ago. But that's almost benign in comparison to the bashing the world's biggest miner, BHP, received: down $12.83, or 29% from May last year.
So what's going to happen in Europe? Methinks Germany will blink and won't let Greece exit the Euro.
It doesn't take long for an idea to become an accepted fact in the markets. Six months ago, Greece leaving the euro was seen as so unlikely that nobody had to think seriously about it. Now the "Grexit" — as a Greek exit from the euro zone has been dubbed — is increasingly seen as a done deal. There's just one snag with that analysis. It isn't going to happen. Germany will realise the risks involved, eat its words and come up with a mega-bailout. Instead of a "Grexit" we'll see a "Grashall Plan" — as a Marshall Plan for Greece may quickly be dubbed — to reflate its economy and keep the euro staggering on for a couple more years.
However, Greece is almost a sideshow to the real news which is that China will cease to be the all-powerful factory to the world and that India, which has always been supposed to pick up the slack as it begins its long road to industrialisation, won't come to the party.
So here's hoping that BHP will rein in its spending on mega-projects and pay out some healthy dividends instead. Why, it may even find it opportune to do another share buy-back and hand over some of those juicy franking credits to its shareholders. BHP could do with a lift in its share price - and so could I !
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