I think you should ask yourself this question – if the US provides the bailout (which I believe they will) are you going to go out and buy a new fridge, a new car or anything else with your discretionary spending – assuming that is that your retain some discretionary cash. I would think the answer is no, and you will not do so for some time until you feel more secure about your job and the future. Yes the bailout will cause an increase in commodity prices – but do not forget the substantial increases in IO coming onstream, and into a market where demand, clearly must reduce – regardless of all the arguments about the strength of the Chinese economy. And what of reports as per the Australian yesterday of IO stockpiles already appearing at Port in China? The Australian yesterday called FMG a speculative buy - but with caution. It may work - but it may not. There remain many hard yards ahead of it.
FMG Price at posting:
$4.92 Sentiment: None Disclosure: Not Held
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