THE DISTILLERY: AAA for agony

Oh, no, a groundhog sort of morning in that there's no real topic that grabs me or my coterie of scribblers. So it's a bit like yesterday, a morning of mix and matching. The Queensland train set gets another mention or two, the NBN rears its ugly trench, likewise ageing, economic policy, the investment breaker AKA Nufarm and BHP Billiton's Canadian road trip. But probably the most important event was the surprisingly sharp fall in the market yesterday. Only one jotter thought it worthy of comment.

News Ltd's Terry McCrann noticed that the market went 'arrrgghhhh' and has its worst day for two months, writing this morning: "A little shudder ran through the share market yesterday. Now it wasn't a signal we are heading straight back to a 2008 future. At least not yet. But it should act as a major wake-up call. The drop of something less than two per cent wasn't one of those earth-shattering days. But it was substantial and it came out of a relatively blue sky....One way or the other we will be looking back to early October. When the dollar went to parity for the first time in its free float. When once again, it topped out just shy. Or some mix of both."

The Australian Financial Review reported that "The federal government's AAA credit rating is at risk from being downgraded in the long-term unless 'radical structural reforms' are taken to address budget pressures caused by the ageing population, a global credit rating agency says." Well, just a teensy weensy bit wrong with that paragraph: it's the country's AAA rating, not the government of the day. And the Standard & Poor's report also pointed out there would be no AAA rated countries if the ageing question wasn't addressed. But, as The Australian reported this morning: the S&P report also pointed out that "Australia is expected to be the last surviving AAA-rated country by 2030. Other developed countries will have fallen off the perch because of their ageing populations, according to Standard & Poor's. In a report, Global Ageing 2010, released yesterday, the global rating agency said an ageing population was one of the most significant factors in determining the sovereign rating of a country." So we will still have a AAA rating, all things being equal when I and many people at the AFR responsible for the beat up, are gone. For all its seriousness, the AFR is a tabloid newspaper.

The Australian's Michael Stutchbury says: "Julia Gillard has picked the right target in backing a "rigorous determined drive" to reverse Australia's productivity slowdown. But we've heard it all before – almost word for word from Kevin Rudd early this year. And Labor's productivity agenda is still badly lacking in the key areas of tax, infrastructure, population and industrial relations. The Prime Minister's welcome new rhetoric argues that the "patchwork economy" pressures from the mining boom can best be eased by raising the economy's overall speed limit."

Business Spectator's Stephen Bartholomeusz brings a bit of hard nosed analysis to Potash Corp and its anti-BHP campaign that many news outlets simply regurgitate: "No normal, rational player without large-scale existing interests ought to be able to out-bid BHP Billiton, particularly as passive members of a consortium, unless the funding structure for the bid has been heavily tweaked for non-commercial reasons. Sinochem is supposedly being backed by the Industrial and Commercial Bank of China. If a consortium proves too hard to assemble – or generates too much cynicism for it to be acceptable to the Canadians – an obvious strategy for Sinochem would be to try to simply block BHP Billiton, perhaps by creating an alliance with Potash Corp similar to the one Chinalco tried to negotiate with Rio Tinto when it intervened to try to stop BHP Billiton acquiring that company." This is something newsagencies like Bloomberg could remember every time they report 'new bid threat to BHP play for Potash'.

The Australian's Matthew Stevens notes BHP Billion's surprise at the anti-takeover sentiment emerging in Canada: "BHP Billiton is concerned that a seachange in Canadian attitudes to foreign investment is the main threat to its long-planned potash bid. BHP, like the rest of us, can't avoid hearing the white noise about alternative offers for Potash Corporation of Saskatchewan (two or three initiatives involving, separately, Sinochem, the Ontario Teachers Pension Plan and a Norwegian chemicals company, were flagged on Monday alone). But the Global Australian is said to be far more concerned about what it has been hearing from representatives of both provincial and national governments in Canada than about Potash Corp's efforts to create ownership alternatives or, at the very least, the impression that there might be some." Canadians are speaking with forked tongue on foreign ownership, 'OK for us to buy Aussie assets, not OK for Aussies to buy our assets.'

And in the same industry, The Australian's John Durie said yesterday there's action in Nufarm shares: "Bullish news on the US farm sector and a Chem China takeover in Israel have boosted Nufarm's stock price. But still the stock can't top the apparent $4.25 a share barrier on its price. The stock opened up sharply on the news, climbing 11.3 per cent to $4.22 a share before easing to trade up 5 per cent at $3.99 a share. The US Department of Agriculture released figures overnight tipping an early rebound out of recession for the farm sector with farm income to grow by 24 per cent to $US77.1 billion ($78.7 billion). Separately, Bloomberg reported Chem China is acquiring a 70 per cent stake in Israeli-based farm chemical company Makhteshim-Agan Industries, raising hopes it might look at Nufarm again."

Fairfax Insider, David Symons made a similar point: "The market may have recorded its biggest one-day fall for about two months yesterday, but Nufarm provided a rare bright spot. Shares in the agricultural chemicals manufacturer closed up 16¢ at $3.95. Fuelling the increase was news that a big competitor, Israeli company Makhteshim Agan Industries – the global leader in off-patent crop protection – had received a privatisation offer from China Chemicals, which made headlines in 2007 with a tilt at Nufarm." But the Fairfax broadsheets reported on the news pages that the federal government has banned a chemical called endosulfan used in pesticides produced or distributed by companies, including Nufarm. The urgers who pushed the shares up yesterday missed that one.

Fairfax economics writer, Peter Martin continues to question the need for an NBN: "I am sure that faster, more widespread broadband would be nice. But I keep being told it's essential (''physics doesn't allow faster copper'') and essential now (''the problem is that most people don't understand the advantages we will have if we do this now'') in an inversion of the usual injunction against being an early adopter." The Australian's John Durie this morning seems to be a believer: "Mike Quigley will start to fill the information void on the NBN today, with an address to an industry conference in Melbourne. Next week, he will appear before a Senate Estimates Committee, which should clear more issues, but with his business case still to go to the government the reality is there are still many unanswered questions. This, it must be noted, should not be confused with any slowdown from either Telstra or the government's side, because the reality is they both need each other. Yesterday's annual Commsday conference in Melbourne highlighted industry support for the NBN, with the call by Telstra's David Quilty for industry co-operation backed by Optus's Maha Krishnapillai."

No worries at the AFR about booms, with Chanticleer telling us this morning "If you thought the QR National float contained some bullish revenue and profit growth forecasts, then you haven't looked west at Andrew "Twiggy” Forrest's Fortescue Metals Group, which is fast becoming the poster child of what Treasuer Wayne Swan says is the biggest mining investment boom since the 1850s gold rush."

And, finally Fairfax's Elizabeth Knight says: "Gender is the new business black. But in terms of fashion most of us are followers not leaders. This is also the case in business - which is not setting the pace on redressing the gender imbalance in management ranks. It is getting on the program because it recognises, rather than defines, trends. I am not convinced most businesses are really concerned or even appreciate that swelling the number of females in the ranks of management is any more meaningful than tie width. But business understands that the public has expectations and that its constituents matter." I understand there are a lot of female customers in business and among consumers and they buy and sell with ease and ability, decide on budgets, loans etc. Strange how big business refuses to recognise that ability and has to be forced to do so by edict.