Bull run or bull trap? 12:33pm: RBA assistant governor Guy Debelle has just declined to answer a question on the central bank's board meeting minutes, which were released earlier today. Dr Debelle, who as we outlined earlier spoke on liquidity and banks after the financial crisis, said he would only answer questions relating to the conference. Dr Debelle's appearance comes a day before the appearance of RBA governor Glenn Stevens at a House of Reps hearing in Canberra tomorrow. The committee meeting is likely to be the last chance for the central bank governor to talk down the Australian dollar. The RBA's jawboning on the need for a lower exchange rate has been partly credited for the recent weakness of the Australian currency, which is currently trading close to its year's low of 88.48 US cents (which was in August). 12:22pm: Be careful who you listen to, says Morgan Housel from Motley Fool, as he debunks and deciphers common financial idioms. My job requires reading a lot of financial news. It's one of my favourite parts. But it gives me a front-row seat to the downside of financial journalism: gibberish, nonsense, garbage, and drivel. And let me tell you, there's a lot of it. Here are a few stupid things I hear a lot. They don't have any debt except for a mortgage and HECS/HELP. And I'm vegan except for bacon-wrapped steak. 11:48am: BHP Billiton has lost patience with a West Australian nickel mine that has endured multiple safety problems over the past three years, in a move that will likely see jobs lost. The most recent problem at the Perseverance Nickel Mine came on October 31, when nine men were trapped underground for more than nine hours. BHP has been reviewing the mine since that incident, and has today announced its closure. "Following this analysis, BHP Billiton has decided it is unable to safely resume operations in the sub-level cave at Perseverance mine," the company said in a statement. BHP said it would continue processing nickel at Perseverance and would resume nickel mining nearby, but it may not be enough to prevent jobs being lost. 11:35am: Joe Hockey has abandoned the Government's commitment to achieve a budget surplus by 2016-17 as promised by Labor arguing it would never have been achieved because spending was racing out of control. Instead he has unveiled a bleak economic outlook for the economy on the eve of the Christmas period, projecting $123 billion worth of deficits over the next four years. Releasing the Mid-Year Economic and Fiscal Outlook report - a snapshot of the economic picture at the half-way point of the financial year - he revealed a revenue collapse of $16.8 billion for the year contributing to a budget deficit in June 2014 expected to reach $47 billion, the third highest on record. The Treasury forecasts also reveal escalating debt which if left on its current path would see gross debt reach $667 billion by 2023-24 - or around 26 per cent of GDP. 11:20am: The outgoing chief executive of General Motors, Daniel Akerson, has named some of the reasons behind the company's decision to cease manufacturing in Australia. Speaking after a function at the National Press Club in Washington, DC, he told Fairfax Media, "There were so many factors in that decision, but basically you have a low tariff economy, so outside importers have an advantage, you've got a strong Australian dollar and you've got a supply chain... that is getting weaker." Asked if government subsidies played a part Akerson said, "I don't want to go into that." He said wages were always a consideration, especially when there were comparatively lower wage economies in the region. Coming a week after he announced his resignation, Akerson's lunchtime address at the Press Club was seen by many as part of a victory lap. In prepared remarks Akerson announced the company was preparing to invest US$1.3 billion in five US plants. "Outside importers have an advantage": GM chief Daniel Akerson said there were many reasons behind the decision to cease Holden manufacturing. 11:12am: Shares in GDI Property Group have opened lower on their debut after the company raised about $310 million in its initial public offering. Shares in the property investment manager opened at 95 cents, below its IPO price of $1 a stapled security, and last traded at 90 cents, down 10 per cent and valuing the company at $511 million. Credit Suisse was the sole lead manager on the deal. 11:09am: Assistant RBA governor Guy Debelle is set to answer questions at a finance and banking conference in Sydney today. But ahead of his appearance, Robert Engle, a professor of finance at New York University's Stern School of Business and Nobel laureate, is speaking at the annual international gathering about systemic risk, an issue central to the international banking system since the global financial crisis. He notes that according to the latest measurements, Japanese institutions have the highest systemic risk, following by China. Australia doesn't even make it on to his chart, with the size of the risk so small that it is less than that of a large bank in the US or China, Professor Engle says. You can take a look at the measurement tools here. 11:05am: One more on Goldman's Coppleson (see post at 9.45am). He also offers a few recommendations on what to buy in the ""upcoming rally"": ""What stocks to own... my picks for the rally include - the banks, NAB & Westpac (but all 4 will go), IRESS, Macquarie Bank, Henderson's, Toll Holdings, Sims, BHP, Seven West Media, Super Retail, Flexigroup, PanAust (this the wild card - but has been oversold), CSL, FOX & Wesfarmers . BUT - there are plenty more that will go hard with the Christmas rally... 10:52am: While the Murdoch clan rewards itself most handsomely for its minority control of the empire, it seems they've lost an extremely well-performed CEO by not paying him well enough. Australian Shareholders Association spokesman and shareholder activist Stephen Mayne is giving the Murdochs both barrels on Twitter for losing Realestate.com.au CEO Greg Ellis, especially when the ASA was warning the company that it was under-paying Ellis: Ellis quitting also becomes an extra problem for REA chairman and Ten Network CEO Hamish McLennan, Michael Pascoe (@michaelpascoe01) notes: Having to find both a new CEO and CFO for REA leaves Murdoch stalwart McLennan open to the charge of being a part-time CEO at a time when Ten needs all the full-time help it can get to crawl out of the pit into which it has crashed on Lachlan Murdoch's watch as chairman and/or CEO. 10:43am: The Reserve Bank has kept the option of cutting rates further as it weighs an ""uncomfortably high"" currency against signs interest-rate cuts were working to stimulate the housing market and economy. \""Given the substantial degree of policy stimulus that had been imparted, it was prudent to hold the cash rate steady,"" the Reserve Bank said in minutes released today of its December 3 meeting, where it held the rate at a record-low 2.5 per cent. It said the board didn't want to ""close off the possibility of reducing it further should that be appropriate to support sustainable growth in economic activity."" Markets and economists predict the RBA will leave rates unchanged in the near term to avoid a growth gap emerging as mining companies plan fewer projects. Low borrowing costs are driving up home pric 10:32am: Analysts and investors continue to scratch their heads over the ill-conceived play by Senex for AWE, which the target knocked back at the weekend ('you can't sack me, because I've already resigned' was the quip of one observer of the imbroglio.) Today, Deutsche Bank re-iterated its 'hold' recommendation on AWE, pointing to the lack of obvious synergy by putting the two companies together: There is little surprise in the AWE Board's rejection. While pitched at a premium to last close, the offer provided no upside to our assessment of fair value, or recognition of additional value in AAL [AWE's Indonesian asset]. However with no obvious synergies between the two companies, we struggle to see an improved bid. Sensex shares are up 2.1 per cent at 72 cents after plunging 8.4 per cent yesterday, while AWE shares have added another 0.6 per cent to $1.2775, adding to yesterday's 7.2 per cent rally. 10:22am: Bank customers could bear the brunt of funding tough new international rules imposed after the financial crisis, the Reserve Bank says. RBA assistant governor Guy Debelle said in a speech today that the Basel 3 requirements, which kick in from January 2015 and that require financial institutions to hold sufficient high-quality liquid assets to withstand 30 days of stress, "will be more costly for the bank to provide." "Hence, one would expect to see an increase in the cost to the customer of obtaining that liquidity service," Debelle said in a speech to the Australasian Finance and Banking Conference in Sydney. Debelle said the current rate of return on at-call accounts did not sufficiently reflect the cost incurred by banks from the need to provide such liquidity. 10:15am: The resignation this morning of realestate.com.au chief Greg Ellis, means the online property group is now on the hunt for a new CEO and chief number cruncher. The Ellis resignation, to pursue opportunities with a non-competitive organisation overseas, comes weeks after Jenny Macdonald resigned for personal reasons. Realestate.com.au chairman Hamish McLennan must be so happy heading into Wednesday's AGM for Ten Network, CBD notes: We're sure that shareholders will be overjoyed at the news that his side job will be providing so many distractions for the man charged with turning around the embattled network. Shares are now down 9 per cent at $36.90. 9:52am: Westpac chief economist Bill Evans has maintained his forecast for two further interest rate reductions from the Reserve Bank but pushed out the timing of the cuts by three months after inferring that Governor Glenn Stevens was "in no mood" for a February cut. The bank now sees the next cut coming in May (delayed from February) followed by a final reduction in August (delayed from May). "While we believe the case for lower rates has already been established our forecasts for the near term have to be mindful of the thinking of decision makers," Mr Evans said in a report, citing comments from the AFR interview with the Governor last week. We hold the view that with the RBA forecasting growth to be 2.25 per cent in 2013; 2.5 per cent in 2014 (both below trend) and a gapingly wide range for 2015: 2.75 per cent to 4.25 per cent there is a case for more conventional stimulus. We can see from the Governor's current position that it is not going to be acted on in the near term. Overall the need to assess whether a credit fuelled property boom emerges; await the "fate" of the AUD; and track residential construction points to the Bank delaying the next rate cut until later in 2014. 9:44am: This week is the week three of the big four banks pay out their dividends, sending billions back to shareholders, which is one factor that could contribute to the much anticipated/ridiculed Santa rally: On Monday, ANZ paid out nearly $2.5 billion through the distribution of a 91¢ a share dividend. On Wednesday, National Australia Bank will pay out nearly $2.3 billion through the distribution of a 97¢ a share dividend. On Thursday, Westpac will release more than $2.7 billion through the distribution of an 88¢ a share dividend, plus another $310 million through the distribution of a 10¢ a share special dividend. This week's bank stock dividend payments come on the heels of other S&P/ASX 200 stocks paying out significant sums at the tail-end of last week. Investment bank Macquarie returned nearly $340 million to its shareholders last Thursday, while chemicals and explosives manufacturer Orica returned about $202.5 million to its shareholders on Friday. An additional $27.9 million will be returned to shareholders this Thursday when BT Investment pays a 10¢ a share dividend. 9:32am: The big banks are leading the charge this morning, all up around 1 per cent, while IAG is slumping after coming out of a trading halt (takeover of Wesfarmers insurance unit and $1.2 billion capital raising): Westpac: +1.2% at $31.14 But the biggest loser among the top 200 this morning is REA, which has slumped 7 per cent after announcing its chief executive is resigning. 9:22am: Gas pipeline giant APA Group has finally clinched a takeover deal with long-time target Envestra, sweetening the value of its offer and opening up the option for shareholders to receive some of the offer in cash. Envestra's independent board directors have agreed on a series of steps that would result in putting the offer, which values it at about $1.17 per share, to shareholders for their approval. It still depends, however, on assessment by an independent expert, approval from lenders and full due diligence. Both shares aren't trading yet. 9:16am: The sharemarket has opened higher, tracking overseas markets gains in the wake of encouraging US and European economic data. The benchmark S&P/ASX200 index is up 28.2 points, or 0.6 per cent, to 5117.8, while the broader All Ords has gained 26.7 points, or 0.5 per cent, to 5119.8. Among the sectors, financials are up 0.7 per cent, materials have gained 0.6 per cent, while consumer discretionary shares are down 0.2 per cent. 9:06am: Online real estate classified service REA Group is losing chief executive Greg Ellis. Ellis will pursue an opportunity overseas in a non-competitive organisation, the company said. He will remain REA chief until a successor is appointed and will assist the board in implementing a transition plan. Ellis joined the company in 2008 when its market capitalisation was about $500 million, and his tenure has seen the company's value grow to more than $5.3 billion. The stock has more than doubled in value to $40.53 this year. Successful tenure: REA shares over the past years. 8:52am: In company news, shares in Warrnambool Cheese and Butter have been placed into a trading halt ahead of an announcement from the Australian Takeovers Panel. The panel temporarily banned Warrnambool's Canadian suitor, Saputo, from acquiring any more shares in the company late last month. In a statement to the ASX this morning, WCB said it expected an announcement from the panel regarding Saputo later in the day. WCB is the target of a three-way bidding war between Saputo and Australian milk processors Murray Goulburn and Bega. The panel action began after Murray Goulburn complained that Saputo had misled WCB shareholders about the true value of its bid of $9.20 cash a share if it acquired more than 50 per cent of the company. Saputo had previously offered $9 cash per share, with WCB paying a 56 cent franking credit if it reached a majority stake. Murray Goulburn argued this effectively valued its bid at $9.56. 8:45am: Over at Goldman Sachs, Richard Coppleson remains convinced the Christmas rally is on. ""The Australian market is in its strongest trading period of the year,"" Coppo writes in yesterday's PM note. ""It's been up at this time of year 27 out of the last 33 years!!!"" He offers some interesting stats (including exclamation mark inflation): Over the last 33 years -: if you bought the market around mid-December & held that position for about the next 15 trading days {i.e. selling on the 5th amazing 80% of the time - i.e. 27 of the last 33 years (or 80% of the time) with an average gain over the entire 33 year period of 2.93% Also 30% of the time the gain was huge at +6% or more in just that 15 day trading period !!! This is AMAZING in its sheer consistency !!!! While more recently 16 out of the last 18 years (ie 88% of the time) the market has risen, BUT the average gain in the 16 up years was +3.63% - over just 15 odd trading days The average gain over the 27 up years is a very significant +4.26%, so you go long on the close on the 13th December 2013 to Wednesday 8th January 2014 or 6th trading day of January}, then that trade would have been profitable an Dec 2013 & stay long until say the 5th trading day of January - which is the 8th January 2014.... We've reopened last week's poll on this one as it remains topical: Total votes: 1125. Poll closes in 11 hours. 8:36am: Wall Street rallied overnight as upbeat economic data from the United States and Europe boosted optimism ahead of a key Federal Reserve decision later in the week. The Dow Jones rose 129.21 points or 0.82 per cent, to 15,884.57, the S&P 500 gained 11.22 points, or 0.63 per cent, to 1786.54 and the Nasdaq Composite added 28.542 points or 0.71 percent, to 4029.518. Investors have been trying to gauge when the US central bank will start winding down its market-friendly $US85 billion monthly bond purchases, with some expecting the Fed to announce a tapering in March. Stronger economic data of late, including Monday's numbers showing US manufacturing output rose for a fourth straight month in November and last month's payroll report, led some to believe the tapering could come as soon as the Fed's meeting this week. The Fed has said it will slow the program when certain economic indicators meet its growth targets. Global manufacturing and business activity expanded in December, as euro zone businesses ended the year on a high thanks to a surge in new orders, though the rate of manufacturing growth slowed in China. "There are signs of growth here in US is being emulated elsewhere, the recovery is in relatively good footing worldwide and the Fed's decision to eventually start to taper is positive in the long run," said Peter Jankovskis, co-chief investment officer at OakBrook Investments. "The market is waiting to see what the Fed is going to decide to do," he said. Bottom line, the economy continues to show signs of strength and eventually the market will react positively to that. 8:36am: Local stocks are set to open strongly higher as overseas markets lifted on robust economic data and M&A news. SPI futures up 39 points to 5,140. AUD fetching 89.56 US cents, 92.26 yen, 65.11 euro cents, 54.93 pence On Wall St (in mid-afternoon trade), S&P500 +0.6%, Dow Jones +0.8%, Nasdaq +0.7% In Europe, Eurostoxx +2%, FTSE100 +1.3%, CAC +1.5%, DAX +1.7% Spot gold jumps 0.5% to $US1244.90 an ounce Brent oil rises 1.4% to $US109.78 per barrel Iron ore slips 0.8% to $US134.90 per tonne The main economic focus today is the release of the most recent RBA board meeting minutes with investors keen for more comment on the value of the Aussie. In economic news on Tuesday, the Federal government is due to release the Mid-Year Economic and Fiscal Outlook (MYEFO), the Reserve Bank of Australia (RBA) is slated to release the minutes of its December board meeting, and RBA assistant governor (financial markets) Guy Debelle will be a panel discussant at the 26th Australasian Finance and Banking Conference. The Australian Bureau of Statistics (ABS) releases November motor vehicle sales figures and international merchandise imports data also for November. Here's the full need2know 8:36am: Good morning.