Nowhere to hide. It’s sell, sell, sell and sell a few more on the ASX and other markets in Asia today as we catch up to Friday night’s startling slide on global markets. After Wall Street’s Friday crunch (much bigger than Europe’s), our market started with a big near-2% slide this morning. Last week, American shares fell 5.8%, eurozone shares lost 6.7%, Japanese shares fell 5.3%, Australian shares fell 2.7% (not as bad as a lot of reports suggested), and Chinese shares lost a massive 11.5%. From their highs earlier this year US shares have now lost 7.5% (up till last Friday night), Japanese shares are down 7%, Australian shares are down 13%, eurozone shares are down 14%, Asian shares have lost 20%, and Chinese shares are down a huge 32% and remain the big concern along with the slowing economy. In the case of US crude, oil prices are at levels not seen for more than six years. Copper and coal are again around six-year-plus lows. Iron ore, of course, remains weak. — Glenn Dyer

Bet on the Fed? Amid all the market turmoil this week, one public appearance will attract almost as much attention. This Thursday marks the start of the annual Fed conference at Jackson Hole in Wyoming, where Stanley Fischer, the No. 2 at the US central bank is due to speak on Thursday night, our time. Watch for more guidance on the expected US rate rise in September, but also the impact of the current market sell-off (especially the weakness in China) on the Fed’s thinking. The conference this year has as its theme “Inflation Dynamics and Monetary Policy”. Last year’s looked at the labour market. We can take from that that the conference and Stanley Fischer’s speech will focus on the current low inflation rate in the US (and much of Europe and China, not to mention the rest of Asia). With commodity prices, especially oil and gas now at six-year-plus lows, the chances of a rate rise next month, and the rest of 2015, looks like it will hinge on the confidence the Fed has in inflation returning to its 2% target sooner rather than later. The big fear is that a rate rise, on top of weak-to-falling inflation, chokes the economy. This is a big problem in the US — the Fed’s preferred measure of inflation hasn’t been under 2% for the past three years, and still the idiotic inflationistas fret over every upward bump in prices. By the way, Australian Reserve Bank governor Glenn Stevens will speak on Wednesday at the National Reform Summit being flogged by The Australian Financial Review and The Australian. Glenn Dyer

Seven West Media was right. Nine Entertainment Co reports this week, as does the embattled Ten regional affiliate, Southern Cross Austereo. Both will provide the opportunity for the local business and investment community to focus on the message from last week’s Seven West Media’s $2 billion-plus write-down of its TV, newspaper and magazine mastheads and licences.

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Here’s a reminder of what Seven said:

“This accounting adjustment reflects revisions to our future growth forecasts accounting for free to air advertising market sentiment, prominence of new market entrants and changes in future cost assumptions based on recent market operating market conditions. The Directors have agreed that significant changes in operating market conditions have occurred since the end of the financial period, therefore it is considered prudent to recognise this non-cash adjustment to the carrying values of the assets in our business.”

Will Nine’s directors take a similar stance? That’s now the view of many on Wall Street, especially among analysts at Sanford C. Bernstein, one of the leading media research houses. The firm’s leading media analyst, Todd Juenger, said in downgrading the ratings of Disney and Time Warner: “The market is now valuing US ad-supported TV businesses as structurally impaired assets. We believe this is fair and warranted, because: a) we believe TV advertising is undeniably in secular decline; and b) affiliate fees are now also being put at increased risk.” He also that TV advertising “is entering a prolonged period of structural decline” as more viewers move to platforms that are less supportive of advertising and the market is right to value the businesses as though they are “declining assets”. Investors have been moving that way in 2015 — shares of 21st Century Fox, the key Murdoch clan company, are down more than 23% this year (and over 6% last week). News Corp shares have “outperformed” its larger sibling, losing just 7.4% so far in 2015, with all of that fall happening last week. — Glenn Dyer

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Peter Fray
Peter Fray
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