THE new force in iron ore has always been one of a kind.

After Andrew "Twiggy" Forrest's Fortescue Metals raised eyebrows with an announcement on Tuesday that 10 per cent of its stock was on loan, presumably to short sellers, it is now saying it was told it had to do so once it had the information.

"It acted on that advice," said a company spokesman. "Now Fortescue is seeking the company's transparency to be matched by other market participants."

It's well known in the market that there are plenty of short positions in many top ASX-listed companies, but none have yet found the need to disclose those positions. However, Twiggy has always been special, and his lawyers must be, too.

Fortescue shares continued to plunge yesterday, closing 25c lower at $6.89 after an expected rally to cover the sales failed to eventuate yet again.

The market has seriously questioned Fortescue's original assertion that New York hedge fund Harbinger Capital Partners unwittingly lent its shares to short sellers. Xchange understands Harbinger would have received a statement each month showing the fees it was receiving for the loan of its shares.

Fortescue, which has faced plenty of scepticism over the last few years, had built up a fair amount of credibility and goodwill more recently as it appeared to deliver on all of its lofty promises since beginning production in May.

But it is now preparing to raise money to fund a series of expansion projects, and some are starting to think its attack on short sellers was mostly a misguided effort to put a floor under its ailing share price.

Stokes has company

Consolidated Media Holdings shares continued their decline yesterday despite somewhat puzzling announcements on late Wednesday and again last night that the US bank JPMorgan Chase has quietly built up a stake in James Packer's company over the past four months.

JPMorgan has acquired a total of 44.1 million shares in CMH, giving it a 6.5 per cent stake, worth $147 million at yesterday's close. Its shopping spree beats that of Kerry Stokes, whose Seven Network is believed to have built a 4.8 per cent stake in the stock earlier this year.

Market sources said yesterday it was unlikely the US bank was working on the billionaire's behalf.

The share acquisitions were done through several entities: while some were acquired by investment management units and hedge funds, the bulk of the holding are proprietary positions, with a large chunk owned by JPMorgan Securities Australia.

It is unclear whether JPMorgan bought the shares for clients, or made a punt on the outlook for CMH itself. The timing sure has caught some people's attention, with PBL Media facing crunch time this month in covenant tests for its $4.2 billion debt pile.

Wallace's dog kennel

All listed hedge funds are worse off now than they were a year ago, but only Wallace Absolute Return can lay claim to having invested in some of the year's biggest dogs.

Seven of its top 10 investments in the first half of 2007-08 were some of the most disastrous stocks - including Commander Communications (in receivership), Allco Equity Partners, Babcock & Brown and three of its satellites, Challenger Financial Services and the ailing toy distributor Funtastic. These represented 37 per cent of its investments.

The executive director, Richard Wallace, would not say how many of these shares were held in the second half of the year, but in May he told investors via newsletter that "the Macquarie Group and Babcock & Brown satellites appear, in our opinion, to be cheap at current prices. It would not be surprising to see some of these investment vehicles the subject of further corporate activity."

Overall, in the 2007-08 financial year the value of Wallace's share investments have gone from $150 milllion to $65 million.

But this hasn't stopped Wallace from doubling his management fees to $700,000 in the past year.

Another plod for BHP

BHP Billiton has yet another competition regulator on its back. Japan's Fair Trade Commission has launched a probe into its bid for Rio Tinto, amid complaints from steel makers that it could limit competition in Japan.

The Mainichi Daily News said the commission had been investigating the deal since the end of July for a possible infringement of the anti-monopoly law.

The commission had asked BHP to hand over data on its acquisition plans, but BHP had not complied. The commission then made a binding order that it provide the information.

Anywhere but here

Virgin Blue has again shown it is keen to deploy aircraft on Pacific routes rather than in Australia.

Just a day after it applied for approval to fly a Boeing 737 five times a week between Brisbane and Port Moresby, Virgin's New Zealand-centric carrier, Pacific Blue, has revealed it wants to add more passenger capacity on its routes to Tonga and Fiji.

Virgin's latest request fuels suspicions of a sharp slowdown in domestic demand. Pacific routes, particularly the trans-Tasman, have never been a cash cow.

The airline will also begin nine flights a week between Sydney and Auckland, which will add about 300,000 seats a year to the route.

Virgin's sudden interest in our Pacific neighbours is another sign that the Australian market won't be able to soak up extra capacity.

AGL's star fades

AGL Energy's share price could fall because of a plunge in oil prices and the sagging domestic economy, brokers have warned.

The utility has been a defensive play for investors in a bear market - reaching a 10-month high of $15.55 on Wednesday - but yesterday it slumped more 7 per cent after downgrades from JPMorgan and Goldman Sachs JBWere.

JPMorgan cut AGL from "overweight" to "neutral", warning that its 6 per cent stake in the Papua New Guinea oil and gas project might not fetch the price expected. It blamed a slump in the oil price and construction risks of an LNG project.

xchange@smh.com.au