If the new mining tax is so bad for small iron ore companies that a fresh anti-tax advertising campaign is required why have their share prices risen over the past week and not fallen?
If the new mining tax is so bad for small iron ore companies that a fresh anti-tax advertising campaign is required why have their share prices risen over the past week and not fallen?
Interesting question isn't it, and one which appears to have got lost in the political hoo-ha of the election campaign.
Take the response of Australia's Treasurer, Wayne Swan, as an example. His twitchy political nerves are telling him that the anti-tax advertising has been inspired by the Liberal Party.
Perhaps Swan is right, but if he was any good at his job as the country's top money man he would be looking at the financial reality of what's happening rather than parroting a hackneyed political line fed to him by the public relations spinners on his staff.
The facts of what's happened since the Association of Mining and Exploration Companies proposed a re-launch of its advertisements are quite different to what both sides are saying.
Swan's political comment does not stand up to scrutiny once you consider that the primary financial backer is a former "mate" of the Labor Party, Andrew Forrest.
It is less than six months since Forrest stood shoulder-to-shoulder with Swan's partner in government, the former Prime Minister, Kevin Rudd, to launch a scheme designed to create more jobs for young Aboriginals.
That jobs campaign, which Forrest co-funded, was welcomed by Swan and Rudd without a mention of there being anything political about the cash.
Now that Forrest is spending his money elsewhere he, and AMEC, have suddenly become political. What utter hypocrisy.
Far better if everyone involved considered a few financial realities rather play the fact-spinning game.
On the stock market over the past week as the renewed advertising campaign was being planned for its launch today the share price of Forrest's company, Fortescue Metals Group, rose from $3.93 to early trades this morning at $4.26, a gain of 33c - or 8.4% in a week.
It would be churlish to point out, but why not go the whole hog, and note that the extra 33c on FMG's share price means that Forrest personally has become some $330 million richer in the past week, despite his claims that a new mining tax is bad for his company, and the smaller miners he says he champions .
In fact, to be completely churlish, Forrest yesterday was some $470 million ahead because FMG hit a high on the day of $4.40, a 47c gain, or up 11.9%, before declining late in the day.
Other iron ore companies have joined the FMG bandwagon. Atlas is up 13c (6.7%) over the past week. Brockman is up 18c (6.1%) and Mt Gibson is up by 22c (16%).
The market, which is always right (even when it's wrong!) is voting with its cheque book. Investors, for whatever reason, are buying iron ore stocks just when they are being told that a new tax will hit profits, slow growth, and possibly stop the sun rising in the east.
Why investors are playing such a counter-cyclical game is the real question, and one answer is that the people with money are starting to place bets on the Gillard/Swan government losing the August 21 election, and the mining tax being swept away altogether.
Other early-warning signs of a change of government are also blowing in the wind, such as a recent assessment of talk-back radio callers, and bad headlines for Gillard over family matters.
Sensible observers of the games being played today will dismiss the touchy-feely issues as being too hard to measure.
They can't do the same thing when it comes to money, and the flow of funds into small iron ore miners at a time when they are a tax target of the current government is particularly interesting.
