With a little planning you can fly from Sydney to Port Hedland for $800 return. If you’re a miner with a heavy FIFO schedule you’d probably get it much cheaper than that. So what does that buy you at Dumbafx if you’re an enterprising miner seeking some positive media? Quite a lot:
A set of changes that, as always with Fortescue, has attracted its fair share of doubters, but appears to be winning acceptance.
…When asked why its debt was trading below face value, Fortescue chief financial officer Stephen Pearce said there was no single reason.
“It could be general market views, it could be balancing their own book, it could be a lot of reasons why they would buy and sell a debt piece just like an equity piece,” he said.
“It could be around views on China, iron ore or whatever.”
Just another sceptic for the turning, perhaps.
The reporter inspected the beneficiation plants in the Chichester Range this week with the assistance of Fortescue Metals Group.
The article is a very long and painstaking look at how FMG is lowering its costs. Splendid stuff, as I’ve noted myself at times. What matters, though, is it’s point of view can’t be trusted. This is a junket. The purchase of favourable editorial for the cost of a flight. Going cheap, especially since the FMG is not an advertiser.
There is no mention in the article of the obvious truth that FMG can lower its costs as much as it likes and it won’t matter a damn. In an oversupplied market, lowering costs only lowers the price of the product for the customer. To survive FMG must lower it costs below that of its large competitors, which it will never do:
The article is an obvious affront to any definition of functional “journalism” but that is a by-the-by. We already know that Dumbfax needs to overhaul its junket policy. The problem runs much deeper. When it has stuff being pumped out regularly by the Campaign for National Ignorance it’s obvious that a complete clean out is needed:
…if you’re looking for someone to trust on China you could do worse than our central bank. It’s well aware of the importance of China to our international prospects and so puts a lot more personpower than most into studying it: six or seven economists in Sydney, plus another two attached to our embassy in Beijing.
Kent says that although the weakness in China’s property and manufacturing sectors is clearly of concern to commodity exporters like Australia, there are a number of countervailing forces supporting broader activity in China.
“First, growth in the services sector [worth about 45 per cent of GDP] has been resilient, and should continue to be assisted by a shift in demand towards services as incomes rise,” he says.
“Second, growth in household consumption has also been stable in recent quarters, aided by the growth in new jobs. Of course, such outcomes cannot be taken for granted; if the industrial weakness is sustained, it might eventually affect household incomes and spending.
“Third, Chinese policymakers have responded to lower growth by easing monetary policy [access to loans] and approving additional infrastructure investment projects.
“They have scope to provide further support if needed, although they may be reticent to do too much if that compromises longer-term goals, such as placing the financial system on a more sustainable footing.”
But here’s the good news: Kent reminds us that the shift in demand towards services and Western agricultural products in China and Asia more broadly presents new opportunities for Australian exporters.
Yada, yada, yada and on its goes, as if services exports to China will lift to replace commodity exports to China, no worries and no questions asked. That this is poppycock is a very simple matter of fact, as the ‘Campaign’ knows well:
It took me precisely 3 minutes and 38 seconds to find the DFAT charts (the link is for you, Campaign) that shows that Australian goods exports (read dirt) are roughly 10 times larger to China than are our services exports.
But let’s not get bogged down there. The important point is that the last person you would want to trust on China is the RBA. It has just admitted that it has no idea how to forecast commodity prices (why aren’t you inquiring into that, Campaign?) and has the worst record of cock-eyed China over-bullishness of any forecaster in the world over the past five years.
If this were journalism in any recognisable form it would be asking why that is the case. This is, in fact, just another junket, this time the payment is insider access in return for favourable coverage.
The Campaign is very likely paid well north of $3ook to produce this propaganda. I suggest he be fired and junior journos instead be shipped in by bus to Martin Place. Much cheaper and I’m sure that the RBA will pay the fare. Perhaps they’re already onto , from The Australian:
Fairfax will axe 150 jobs at its Metro Media division by May in a much bigger wave of cuts than was initially anticipated, Diary can reveal.
This is in addition to deep cuts in the marketing and product departments in recent weeks.
At the recent AGM, chief executive Greg Hywood signalled another push to reduce costs but did not disclose any targets or areas of the business impacted by the move. Metro Media publishes The Australian Financial Review, The Sydney Morning Herald and The Age.
Of course, Dumbfax is dedicated to finding the silver lining no matter how gigantic the dark cloud given its remit to promote real estate (sorry, the services economy), but what a sad and sorry sight it is for the formerly great Fairfax name.
