Thursday 31 May 2012

Global warming

This is a seminal work which discusses the effects of reducing visible pollution while not addressing greenhouse gases.

Note, we are already seeing large areas where methane hydrates are being released into the atmosphere.

Global Dimming

Since measurements began in the 1950s, scientists have discovered that there has been a decline of sunlight reaching the Earth; they called it global dimming.

But according to a paper published in the journal of Science, the dimming did not continue into the 1990s and indeed since the 1980s scientists have observed a widespread brightening.

What caused the dimming to go down and what effect will it have, if any, on climate change?

The film explores the theory that pollution is shielding the oceans from the full power of the Sun, and disrupting the pattern of the world-s rainfall.

There is evidence that dimming caused the droughts in sub-Saharan Africa which claimed hundreds of thousands of lives in the 1970s and 1980s.

It reveals that we may have grossly underestimated the speed at which our climate is changing.

At its heart is a deadly new phenomenon. One that until very recently scientists refused to believe even existed.

Alarmingly, the dimming continues today, and Asia, home to half the world-s population is currently under threat.


Hasties money disappears from UAE

This relates to the Hasties Group which folded in Australia last week with a loss of 1500 jobs.
Millions shifted from UAE as Hastie collapsed
The ABC has learned that as many as 1,500 Hastie Group workers in the United Arab Emirates may have lost not only their jobs but also their entitlements in the company's collapse late last week.

31 May, 2012

Their termination entitlements are in jeopardy because more than $3 million was transferred from Dubai to Australia in the days before administrators and receivers were brought in.

The company's top three executives, who signed off on the money transfer, then left Dubai on fears they may be detained.

On May 20, as Hastie Group executives tried to negotiate a new deal with their banking partners, Hastie International electronically transferred 11 million dirhams - more than $3 million - from their local bank in Dubai to ANZ Bank in Sydney.

The transfer document shows the move was signed off by Hastie's regional finance manager Nathan Davidson and Gary Allen, the regional human resources manager.

It is understood that the transfer was ordered by Hastie's head office in Sydney because of the fragile nature of the company and rapidly evaporating cash flow.

This has left Hastie's head office in Dubai with little or no money to cover the entitlements of around 1,500 workers, some of whom are expatriate Australians.

There is no suggestion of unlawful activity, however Mr Davidson and Mr Allen left Dubai on Monday, when administrators were officially appointed in Australia.

Another top executive, Robert Kirkham, who has had a long history with Hastie, also departed, because of the very real risk that once word of the Hastie collapse hit, those managers faced the prospect of being detained under strict laws in the United Arab Emirates about the need to cover worker entitlements.

There is a high personal risk for foreigners in the Middle East, especially those whose business affairs turn sour, and this could be the case with Hastie - there is no real consistency of laws in the UAE, for example.

There is no implication that the executives were fleeing, but they probably had cause for concern.

'Delicate situation'

It is understood that more than 20 expatriate Australians have been left stranded.

Some are senior managers who have been working on large projects across the UAE in Dubai and Abu Dhabi.

The remaining workers comprise labourers from India, Pakistan, Kuwait and the Philippines who are entitled by law to gratuities or termination payments.

Clearly, Hastie staff in the Middle East are in the dark, and big questions are being asked about why the $3 million was transferred, where it ended up, who authorised it and whether they will be called to account.

Administrator Ian Carson of PPB Advisory has confirmed the situation in Dubai, but he says it is a "very delicate" situation.

Mr Carson confirmed that the $3 million was transferred at the instruction of Hastie's head office in Sydney and is now tied up as part of a complex investigation.

"They did a sweep under management instructions last week, and I think they were going to transfer some funds back, and then because of the appointment of receivers, the funds were frozen and they are now subject to ... Australian corporations law, which will determine how the priorities work in an insolvency administration," he said.

The administrators say that because the company had so many subsidiaries, money would flow between them regularly.

"Some companies were short of money, some companies had surpluses, so the norm with companies like this is to move the funds around," Mr Carson said.

"I think that management actually had intended and tried to transfer some funds back, but before they could do that the receivers had been appointed and the accounts were frozen, and so there is nothing that then management could do."

Hastie had to be sponsored to operate in the United Arab Emirates, and given that the three Hastie executives who can authorise payments have left the country, the sponsor now has a lot of influence.

The sponsor is closely connected to a royal family of the UAE and sources say that the sponsor is refusing to sign termination letters until there is enough money to pay staff entitlements.

As in Australia, there is the possibility that staff who have been stood down may be taken on by other contractors to complete projects, but that cannot happen until local staff are officially terminated and paid out.

They then have to apply for a new work visa in the UAE.

It is a complex and delicate situation, and there is no guarantee that any workers will receive their full entitlements

For video GO HERE

Australian share market crashes - down 7% over month

Australia has had its worst month since the 2008 crisis on the basis of worries about Greece and Spain.

This is the first time that I have seen live coverage of the sort we are seeing in British newspapers in Australia – which says a lot.

Australia: Markets Live: Shares trim losses

Australian shares pare early losses but the main share indexes post losses of more than 7%  - one of the worst months since the global financial crisis erupted - as worries about Greece and Spain dim investor confidence.

5.30pm: And as promised: the evening markets wrap. Thanks for joining us through the day - and we'll be back at 9.30am AEST tomorrow for more rolling coverage of the markets.

5.18pm: One other noteworthy snippet:

Standard & Poor’s Ratings Services said today that it had lowered its long-term rating to 'AA+' from 'AAA', on the state of South Australia and the state's financing arm, South Australian Government Financing Authority. At the same time, we affirmed the 'A-1+' short-term rating. The outlooks on the ratings remain negative.

5.10pm: We'll point to the closing markets wrap shortly. In the meantime, here are some of the biggest movers for May among the top 100:

Aquarius Platinum 45%
Whitehaven 25%
Toll 21%
OneSteel 19%
Fortescue 18.1%
Ramsay Health: 7.7%
News Corp. 6.8%
AGL Energy 4.7%
Coca-Cola Amatil 3.2%
CSL 2.7%

4.53pm: ‘‘Fear has definitely got the market around its little finger today,’’ CMC Markets sales trader Ben Taylor said in a research note.

ANZ was down seven cents at $20.90, CBA fell 34 cents to $49.40 and Westpac slipped 13 cents to $20.29.

NAB, which was trading without a dividend on Thursday, posted the biggest declines among stocks in the S&P/ASX50, dropping 5.63 per cent, or $1.34, to $22.48.

Mr Taylor said the financial sector’s declines came as Moody’s probed the strength of lenders mortgage insurance providers.

‘‘Brokers are also moving negative on the banks considering the lower growth environment, potential for margin squeeze and the difficulty to foresee a change in economic conditions,’’ Mr Taylor said.

Market heavyweight BHP was down 20 cents at $31.97, while Rio backpedalled 49 cents to $56.86.

4.32pm: The dollar, meanwhile, is holding at about 97.2 US cents. Here's more from Bloomberg:

Spain is becoming a huge problem,” said Derek Mumford, a director in Sydney at Rochford Capital, a currency risk management company. “A lot of money is going to be needed to bail them out."

"The Aussie will inevitably be dragged down to a very important support area at 94.50 to 95 US cents.” (Support is an area on a chart where orders to buy may be clustered - Bloomberg adds, helpfully.)

4.20pm: For the month, the ASX200 lost about 7.3% and the All Ords 7.5% - their worst months since May 2010 when the European sovereign debt crisis ignited. (To be the worst month since the GFC/September 2008, the drop needed to be more than 7.8%, which it was tracking at earlier in the day.)

4.15pm: Among the sectors ending higher: Industrials rose 0.8%, consumer staples 0.7%, gold miners 0.6%.

Materials cut their losses to end only 0.5% down (was almost 2% at one point); financials lost 1.1% and energy 0.7%

4.13pm: The All Ords gave up 14.9 per cent, or 0.4%, to 4133.8.

4.11pm: And here we have it: the ASX200 share index lost 17.9 points for the day, or 0.4%, to 4076.3.

4.08pm: Just about to get the closing numbers. Either way, we'll be looking at a loss of about $100 billion in market value for May. It's also the first losing month for 2012.

3.59pm: Industrials, consumer staples, health care are among the sectors up as we head for the closing bell and the numbers settle.

Meanwhile, just taking a quick look ahead to tonight. Watch out for US jobs claims overnight, but also GDP growth figures for the first quarter - with 1.9% annual rate expected.

3.51pm: The Aussie dollar is hovering at about 97.2 US cents - about half a US cent off its lows for the day after the strong capex figures.

Meanwhile, the yuan has slumped against US the dollar, heading for its biggest monthly drop on record, hit by a continuously strengthening US currency in global markets and a conspicuous slowdown in China's economic growth, traders said.

The lack of a forceful US response to the 1% fall in the yuan in May surprised market participants after years of heavy pressure from the United States for the yuan to appreciate versus the US dollar to help balance bilateral and global trade, 
Reuters reports.

Many currency players, who even a couple of months ago suspected yuan depreciation would spark a US outcry, now appear to agree that weak global market conditions have persuaded US politicians to accept the trend.
On the other hand, a sharply weakening yuan could harm China's economy by inciting capital outflow, and the Chinese central bank has acted to control the pace of yuan depreciation.

3.40pm: Within about 20 points of breaking even for the day. Meanwhile, we noted earlier that building approvals fell sharply in some states. Here's the top of a related item:

Bureaucratic obstacles are helping prop up Australia’s $4.5 trillion housing market and neutralising the biggest risk to the country’s mortgage bonds.
While affordability measures such as household debt and home cost-to-income multiples exceed peaks seen in the U.S., U.K. and Spain, prices in Australia are showing signs of stabilising after dropping 7.6 per cent from their November 2010 high. That’s because there’s one missing ingredient for a property collapse: oversupply.

Limited land availability, caps on density and higher levies on developers along with scarce financing have driven the median capital city price for houses and apartments to $462,500 and created a housing shortage that’s set to exceed 600,000 dwellings in 20 years. That’s reducing the likelihood of a price rout, which Fitch Ratings analyst James Zanesi sees as the only threat to mortgages in an otherwise stable economy.

“Australia has had a decade of severe underbuilding,” said 
Matthew Hassan, senior economist at Westpac, Australia’s second-biggest lender with $287 billion in housing loans. “Without the accumulated severe shortage of stock, there wouldn’t be the substantial latent demand for dwellings that has been a strong support for prices.”

3.24pm: The biggest drag on the local market was NAB last time we looked. That's mostly because it's gone ex-dividend today, but the drop - 6.1% in recent trade - is almost half the ASX200's decline.

BHP is the next biggest drag - about half that of NAB's.

On the plus side: WesfarmersWooliesCSL are the biggest advancers by weight - but the contribution of each is relatively small.

3.16pm: Probably haven't focused enough on housing approvals - they got swamped a bit by the capex numbers.

Here's some highlights from ANZ's Paul Braddick and Craig Michaels:
  • Residential building approvals declined 8.7% m/m in April, with both house and flat/unit/townhouse approvals lower in the month (-12.2% and -1.7% m/m, respectively). Total residential approvals remain 24.1% lower in annual terms.
  • Several states saw substantial falls in the month. New South Wales dwelling approvals were down 15.3% m/m, South Australian approvals were down 27.8% m/m and Western Australian approvals collapsed (-46.7% m/m).  
  • The collapse in Western Australia appears particularly strange and is at least partially attributable to the Building Act 2011, which came into effect in Western Australia on 2 April.  
  • Nonetheless, the broad national trend decline in dwelling approvals over the past year is clear, and should be of increasing concern to policy makers.
Does seem a bit odd that the boom state should be a bust for housing approvals - unless all the brickies, etc, have headed to the mines.

3.10pm: Dow futures have turned (very) slightly higher, one indication of improving confidence out there in investor land.

London futures, though, are off about 0.3%.

3.02pm: The market has quietly been paring its whether May is the worst month since September 2008 - or just May 2010 - hangs in the balance.
Gold miners are now up about 0.9% and consumer staples. Material stocks are down 0.9%, financials 1.5% and energy 1.2%

2.54pm:Also along the lines, so to speak, of iron ore and the Pilbara:
Atlas Iron, Australia’s fastest-growing iron ore producer, is open to talks with Fortescue Metals Group to build a railroad in the Pilbara region that will allow exports to meet demand in Asia, Bloomberg reports.

Atlas welcomes a third partner as long as Atlas has room to haul its own iron ore, 
David Flanagan, executive chairman of the Perth-based company, said today. Fortescue, Australia’s third-biggest iron ore exporter, said May 3 it’s open to talks with the smaller rival to co-operate on the development.

Fortescue, doubling its main line to Port Hedland as part of an $8.4 billion expansion to almost triple output, may benefit from swapping rail and port capacity with Atlas, Macquarie Group said in an April 27 report.

Macquarie estimates the Atlas railway project may cost $1.5 billion. Atlas, which is seeking to boost annual shipments to 46 million metric tons by 2017 from 6 million tons, tied up with QR National Ltd. to study building the line to Port Hedland.
Atlas shares were recently up 0.2%

2.45pm: Along the lines of those strong capex figures noted earlier today:
The federal government today gave environmental approval to BHP Billiton's planned $10 billion expansion of its Port Hedland outer harbour port in Western Australia's Pilbara region, Reuters reports.

In a statement, Environment Minister Tony Burke said the national environmental approval included 37 conditions, including measures to protect dugongs and marine turtles, and to ensure no whales are nearby during noisy work on a new jetty.

BHP, the world's biggest miner, had been expected to make a final investment decision on its outer harbour plan this year. The investment is crucial if BHP is to double iron ore production to 
440 million tonnes a year, as planned.

That's something like 1.2 million tonnes a day.

2.35pm:Back to the markets - an overview from Reuters:
Investors fled from risk assets to US government bonds, with the benchmark 10-year Treasury yield falling below 1.6 per cent in early Asian trade on Thursday, its lowest in at least 60 years. The 10-year Japanese government bond yield hit a nine-year low of 0.810 per cent.

Oil prices extended losses after falling more than 3 per cent on Wednesday and copper hit 2012 lows.

"Investors were already exposed to the problems in Spain, but what really disturbed the market were oil prices and U.S. bond yields which broke out of range to hit long-period lows," said Lee Seung-wook, an analyst at Kiwoom Securities.

MSCI's broadest index of Asia-Pacific shares outside Japan tumbled as much as 1.6 per cent to trade a whisker above a 2012 low marked last week. At current levels, the index is set to close the month down nearly 12 per cent, the biggest monthly loss in eight months.

2.27pm: Understandably, there's been a bit of focus on Fairfax Media (publisher of this blog, come what may) and the strike activity over plans to shift 66 editorial jobs from Newcastle and Wollongong - to New Zealand.

New Corp, meanwhile, has used today to reveal it has made three staff from redundant as part of a company restructure.

Staff were told today that a technology writer, news producer and picture editor would receive redundancies.

A spokesman for the company declined to comment further.
(And at Fairfax, Canberra Times journalists have joined those striking this afternoon.)

2.11pm:Here's the start of an interesting read from Reuters on an internet contrarian:
Scott Devitt has long stood out for being cautious in a world of Internet bulls.

In the more than 12 years that he has covered Internet companies as a Wall Street analyst, Devitt has developed a measured approach to a sector that often succumbs to hype.

Devitt, who replaced star Internet analyst Mary Meeker at Morgan Stanley in 2010, was one of the few analysts to cut his price target for Google in January after the company's fourth-quarter earnings missed analyst expectations by more than $US1 a share. In February Devitt downgraded Amazon to equal weight from overweight, while the majority of analysts had a buy or strong buy on the stock.

But those contrarian calls pale next to the one he made just days before 
Facebook priced its $US16 billion initial public offering. That one has become the subject of industry debate, regulatory scrutiny and investor lawsuits.

1.40pm: Legislation to enable the sell-off of NSW’s power generators has passed through parliament, after the state’s lower house backed Shooters Party amendments to the privatisation laws.

MPs in the Legislative Assembly on Thursday supported changes that had been made to the bill in the upper house, which add power worker protections such as guaranteed employment for two years and maintenance of apprenticeships.

1.32pm: Moody’s has downgraded the credit rating of nine Danish banks, citing the impact of the rolling eurozone crisis on bank loan quality and on their fund-raising ability.

The nine, along with the Finnish subsidiary of one of the banks, saw their ratings cut one to three notches, with one of them, DLR Kredit, pushed three steps down into the junk-bond realm at Ba1.

1.28pm: Treasury Boss Martin Parkinson says he has sympathy for mining companies because the peak of the resources boom has probably passed, though the pipeline for investment still has some way to run.

1.15pm: An interesting fact from the CAPEX report. Australian companies are planning $173 billion of new investment in the 2012/13 financial year, including $118.5 billion in the mining industry. Read the full story here.

12.55pm: Australia's performance is around about the middle of the region's. Japan's indexes are down almost 2% particularly because the rush into the yen won't do much for that country's exports.

Hong Kong's Hang Seng and Korea's Kospi are down about as much as Australia's, while mainland China and Singapore's are down less than 1% or so.

12.45pm: As of a few minutes ago, only nine of the top 50 shares were higher. Here are the big movers:

QR National up 1.2%
Wesfarmers 1%
Coca-Cola Amatil 0.9%
Woolies 0.8%
Amcor 0.4%
Decliners:NAB off 6% (Ex-dividend)
Alumina 4%
Fortescue 3.8%
Santos 3%
Oil Search 2.6%

12.35pm: The Aussie dollar has picked up to be trading just above the 97 US-cent mark.

An interesting move, though, can be seen in the interest rate futures gauge created by Credit Suisse.

The market is now viewing the prospect of a 50 basis-point cut by the Reserve Bank on June 5 as as 60% chance. That's up from about 30% at the start of today.

Also, those investors now see the RBA's cash rate as falling about 150 basis points in 12 months' time.

If realised, that would lower the cash rate to 2.25% - a level well below the 3% level touched during the global financial crisis.

If the banks were to pass on that full amount (unlikely) and if oil prices kept falling (possible) then average households may see their finances improve considerably. That's provided the jobless rate doesn't move much, of course.

12.21pm: To be clear, though, the numbers for the March quarter may come in at the higher end of expectations, at least for capex spending but they don't really tell us what has happened since.

We may get a GDP growth pick up for the first three months of the year but the gloom that has broken out since then will mean the second-quarter GDP may come in quite a bit weaker.

12.18pm: Here's a view on those economic numbers from Ben Jarman, economist, JPMorgan:

"The capex adds a little bit more to the story of resumption in firm's expansion plans. We got the construction data yesterday that was strong driven by engineering work and the capex lines up with that," he said.
"So for the first quarter GDP story, what we have in hand now is three from three in terms of strong numbers for capex, construction and retail sales. So that is obviously a good story for the Q1 GDP.

"The issue is the way that Europe is evolving, so it really comes to how worrying the financial market backdrop is when RBA meets next week."
12.07pm: Entering the afternoon, the ASX200 is down about 1.3% (and so, about 8.2% for May).

Materials are down 1.9%, financials 1.7%, energy 1.5% and gold miners 0.4%.
12.03pmABC radio just reporting, by the way, Hastie's demise has left about 1500 workers in the Middle East stranded. Apparently the workers are mostly from India, Pakistan and the Philippines - and they are owed entitlements that they are now uncertain of receiving.

About 30 of that total are ex-pat Australians, ABC says.

11.56am: More on the eco numbers shortly, but this just in from another retailer:
The head of department store chain Myer Holdings says the company can beat its online retail rivals by offering the best of worlds.

With Australian shoppers increasingly buying online and taking advantage of the strong Aussie dollar, retailers are suffering a slump. ('Strong dollar' referring to its longer-term position rather than the past month or so.)

Myer chief executive 
Bernie Brookes told the Annual Stockbrokers Conference in Melbourne that a new ‘‘omni-channel’’ service would enable  customers to buy online but collect and try on items in person.Myer and David Jones both make less than 1 per cent of their earnings online whereas their global peers - such as Macy’s, Marks and Spencer, and John Lewis - have far higher internet sales volumes.

11.48am: Another reasonably good number was private sector credit growth, which came in at 0.4% for April. Economists had been tipping a 0.3% rise for the month. (Credit grew a revised 0.5% in March.)

From a year earlier, private credit rose 3.8% - a bit better than the 3.6% pace expected by economists.

11.45am: One reason for the limited dollar movement is that private capital expenditure for the March quarter came in a bit better than expected.

Such spending rose 6.1 per cent in the quarter versus 4 per cent expected - a figure that should also help boost March quarter GDP figures.

11.42am: The dollar was down a bit, at 96.86 US cents before gaining to just under 97 US cents.

11.40am: From a year earlier, building approvals were down a massive 24.1% (vs a revised 15.8% year-on-year decline in March.)

11.38am: Not very good eco numbers just landing.

Building approvals for April were down 8.7 per cent in the month when economists had been tipping a 0.3 per cent rise.

11.26am: And here's a view on the local market from Peter Esho, chief market analyst at City Index:

‘‘If the financials can bounce off their lows and indicate that they’ve bottomed, then I think the ASX 200 index will find very strong support at around 4000 to 4040 points,’’ he said.

11.20am: Some March private capital expenditure figures out in 10 minutes and April building approvals. Stay tuned.

Meanwhile, some downish news from overseas:

Japanese industrial output rose in April at a slower pace than expected, in a discouraging sign that China's slowing economy and Europe's sovereign debt crisis will weigh on Japan's recovery.

The 0.2 per cent increase in industrial output was less than the median estimate for a 0.5 per cent increase, trade ministry data showed, as some manufacturers curbed production due to an increase in inventories - Reuters reports.

Manufacturers said they expect output to decline in May and rebound in June, but economists said the risks from Europe's debt crisis and a rising yen are reason to be cautious about the pace of Japan's economic recovery.

"Growth was weaker than expected, reflecting sluggish demand for IT-related goods worldwide, particularly in China," said 
Takeshi Minami, chief economist at Norinchukin Research Institute in Tokyo.

11.14am: Here's a look at where the dollar's trading over the past year...and how we're now at about the lowest since November. (Chart from Bloomberg):

10.57am: Three Australian mortgage insurers are facing possible downgrades by ratings agency Moody’s Investors Services.

Moody’s has placed on review for possible downgrades the insurance financial strength ratings of lenders mortgage insurance provided by 
QBE and Westpac.

The agency also extended its review for possible downgrade of Genworth Financial Mortgage Indemnity and Genworth Financial Mortgage Insurance.

The main reasons for the review were the risks posed by high house prices and debt levels in Australia and the potential adverse effects from any structural shifts in the domestic economy.

But Moody’s said it did not expect its review of the mortgage insurance sector to broadly affect its ratings of Australian banks and building societies.10.51am:Shares bouncing off their lows, but here's another market where investor concerns are being registered:
Australia’s bonds rose on speculation predicted weakness in home-building approvals will allow the Reserve Bank to lower borrowing costs, Bloomberg reports - noting this morning's economic news to come.

10-year yields fell to a record and dropped below 3 per cent for the first time before a report that may show growth in building permits slowed in April.

“The economy here is not strong outside of the mining sector and the pressure is on for interest rates to come down.” said 
Derek Mumford, a director in Sydney at Rochford Capital, a currency risk management company. Today’s data “is not really going to turn around the major trend in the Aussie dollar, which is obviously to the downside.”
10.42am: One company in the news this morning is Pacific Brands:

Chairman of embattled clothing retailer Pacific Brands 
James MacKenzie will step down from his post in June.

The company on Thursday announced that Mr MacKenzie would be replaced by non-executive director and Nine Entertainment’s chairman, Peter Bush, on June 30.

Mr MacKenzie will remain on the board as a non-executive director.

Pacific Brands shares are off 1.8% in recent trade.

10.38am: Keep an eye on the Aussie dollar cross-rates here.

10.35am:The dollar is worth keeping an eye on. It's sunk to as low 96.8 US cents in recent trade. Bloomberg is calling the drop the biggest this year against the greenback...trouble is working out when the start point is for that measure. (ie NY close or the local 5pm one).

In any case, the arrow is one way, and we're looking at a loss for the month of about 7 per cent in the Aussie dollar.

10.18am: Also down:
Rio 2.4%
ANZ 1%
CBA 1.4%
NAB 5.5% - but includes ex-dividend trading
Westpac 0.9%
Fortescue 4.9%
Telstra 0.4%
Qantas 1.7%
10.14am: Among key stocks:
David Jones is off about 1.8% to $2.21
BHP is down 65 cents, or 2% to $31.52
10.09am: As you can see in the chart, the market is sinking.

That 1.1% early fall would make it worst month since September 2008 - but we have a full day to go.

Anyway, miners are down 1.9%, financials 1.4% and even gold 1.3%
9.59am: And for May, among the biggest drops so far are:
Toll 21%

Fortescue 14.2%
Rio 13.6%
ANZ 12.3%
9.57am: Not surprisingly, BHP has been the biggest drag on the local market, losing $3.38 so far in May to $32.17 before today. That slide alone lopped almost 15%, or 45 points, off the ASX200 this month (the index's loss is 302 points, prior to today's trading.)

9.54am: Going into today, the ASX200 is down about 6.9% for May. Should it fall 1% or more today, it will be the biggest drop in the index since September 2008 - the month US investment bank Lehman Brothers crashed.

9.49am: Shares in David Jones closed at $2.25 yesterday after hitting a 2012 low of $2.16 last week, and will be among those watch.

Also, hard to look past the 3.8 per cent fall in BHP's New York-listed shares, nor Rio's 4.9 per cent drop overnight. Will have more on that in a moment.

9.40am: Yesterday we had a drop in retail sales in April, and now this from David Jones:

Sales at David Jones are continuing to fall with latest figures showing a drop of about three per cent in the three months to April.

The retailer says its figures came in at just under $400 million.

Chief executive Paul Zahra hasn’t painted a better picture for the next quarter either saying sales in the first few weeks of the fourth quarter have followed the same trend.

9.30am: Good morning. Thanks for joining our rolling coverage of the markets.
Looks like we're in for another rough ride as worries about Spain dim hopes Europe will find a way out of their debt woes. And China is yet to indicate it's about start spending again.