Share prices in Australia have hit new records, and in the case of resource stocks still seem cheap. With strong company profits and a positive economic outlook, some market spruikers are saying “This time it’s different!” That is the on balance verdict of the market (which is still rising), though there are plenty of Cassandras saying a big correction is overdue.

The price of oil is creeping up, and this will create inflation fears that will inhibit share prices. Australia will also benefit from higher oil prices as it makes coal and natural gas more valuable. Zinc and nickel also rose in price on Friday night and this will reignite interest in resource stocks, whose PE ratios are still low.

Hugh Morgan and two of his wealthy pals are reported to have set up a private company to consider the sense of building nuclear power stations in Australia. This is a real way to profit from global warming and we shall all be grateful if this lot can pioneer this relatively clean technology in this country. Note that nuclear power is widely used in Europe and the USA.

Industry and Resources Minister Ian McFarlane ducked and weaved on the ABC in Melbourne and made the point that Australia needed a public debate before anyone started to build a nuclear power station. “And we can’t have a debate until Labor agrees to participate” was the Minister’s line.

Prominent climate sceptic and distinguished former OECD economist, Ian Henderson, has pointed out that the costs of combating global warming will be very high for Australia. We should be careful how far we support this popular approach, with Henderson claiming the latest IPCC report was “alarmist”.

“He said it had misled Western governments over rising temperatures, and warned the cost of mitigation measures would be felt severely in Australia, unless it adopted a ‘balanced’ view”.

From alarmist to humourist: in today’s SMH, Gerard Henderson acknowledges that Kevin Rudd’s Labor Party is brewing with confidence at the moment, but that Peter Costello has Rudd’s measure – with humour.

If, as the Prime Minister declares, the Opposition Leader is “full of himself”, then such a condition is best punctured by humour. The Treasurer is equipped to undertake this task. This suggests that, for a while at least, the Coalition should focus more on Costello and the economy and less on Howard and foreign policy.

Henry agrees. Another ABS News/Washington Post Poll coming from the US overnight found that a massive 64% of Americans believe that the Iraq war wasn’t worth fighting, and George Bush’s approval rating sits at just 36%, having not seen majority approval for over two years. Labor’s run of good polls could mean that the Iraq war, as well as the imprisonment of David Hicks, could be starting to bite the Government politically. If Howard and Co are able to draw attention back onto our “miracle economy”, things could start to swing back their way.

More reading at Henry Thornton.