Abbott support plumbs new lows

From Roy Morgan Research comes more bad news for Prime Minister Tony Abbott, although opposition leader, Bill Shorten, is on the nose as well: Former Liberal Party Leader Malcolm Turnbull is again clearly preferred as Liberal Leader by 38% of electors (up 2% since January 12-13, 2015) well ahead of Deputy Leader Julie Bishop 27%

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The long path to Greek resolution

Courtesy of James Shugg and Sean Callow at Westpac Global Economics: The Eurogroup of finance ministers and central bankers met in Riga last Friday amidst (accurate) speculation that little progress would be made towards reaching an agreement between the Greek government and its creditors on the measures Greece must (re)commit to in order that the long-delayed


Buyers of Fortescue ponzi-bond revealed

So it was nonsense buyers after all, from Bloomberg: Franklin and Capital Group helped lure the iron-ore producer back to the market by agreeing to buy most of a $1.1 billion chunk of securities in a so-called reverse inquiry…The sale allowed the money managers to swap their lower- ranking unsecured notes for secured debt that


This Budget, like others, will favour the rent-seekers

Cross-posted from The Conversation: Long before the release of French economist Thomas Piketty’s smash bestseller, it was recognised by social scientists that income inequality in developed countries had been rising for a while. Economists’ stock-in-trade explanation for this trend was that people whose skills combined well with modern production technologies had seen bigger income growth


Fed mulls perma-QE

From the Boston Federal Reserve: During the onset of a very severe financial and economic crisis in 2008, the federal funds rate reached the zero lower bound (ZLB). With this primary monetary policy tool therefore rendered ineffective, in November 2008 the Federal Reserve started to use its balance sheet as an alternative policy tool when


Iron ore miners balk at dead cat

The big iron short squeeze continues today in the equity market but it’s a bit of fizzer versus the underlying price. BHP has only managed to flop up 1.5% as it’s $500m Singapore tax shifting comes hope to roost and RIO is also under-performing London up only 2%.  FMG is again the standout as it flies


More sell ‘em services delusion

By Leith van Onselen Business Spectator’s Victoria Thieberger has penned an article today spruiking the great boom in services exports which can apparently more than offset the commodity bust: Earnings from services exports last year totalled $59 billion, a little less than the $66bn earned from iron ore exports, and are growing quickly. The rise


PBOC: We’re not stimulating

From MNI via Forexlive: Ma Jun, chief economist of the research bureau under the PBOC: Says recent PBOC deposit reserve and interest rate cuts were not meant to create a strong stimulus effect Simply to maintain a neutral monetary policy position Said capital inflows no longer providing funds for the Chinese economy, liquidity could be


Morgan Stanley: ASX past peak earnings

From Morgan Stanley: What’s Puzzling You? Peak multiples and arguably peak earnings for the ASX 200 leave us cautious on the outlook for Australian Equities. Our Index Target remains below current levels but we acknowledge that the benchmark could trade above this in the short term whilst Yield compression buffers the reality of negative earnings momentum. Index Target Update: We update


Inside Strongman Iron’s meltdown

The Sauce may be a grab bag of disaffected student nut-jobs but they are much better at analysing iron ore dynamics than the MSM. Take this: Strongman Iron, Australia’s fourth largest iron ore producer, will mothball its entire Pilbara operations this week, as iron ore prices continue to tumble around the globe. Strongman is the


NSW government still loving the Sydney bubble

By Leith van Onselen The spectacular investor-driven Sydney property bubble is a frequent theme this blog, with home prices there rising by around 35% since June 2013, according to RP Data (see next chart). This rapid lift in housing prices has, of course, been driven by an unprecedented orgy of investor speculation, whose share of


Macro Morning (records)

By Chris Becker A weakish US durable goods order, nearly unanimous resolve in Europe to screw the Greeks plus a rebounding oil price sent the USD falling and risk markets mainly up on Friday night. Crude rose on the ongoing crisis in Yemen while the falling USD brought gold down but industrial metals and iron


Negative gearing is a tax shelter for fat cats

By Leith van Onselen After demolishing Treasurer Joe Hockey’s claim on Friday that unwinding negative would cause a significant increase in rents, The AFR quoted my work in an article entitled: Negative gearing: what’s true and what’s not? This AFR article also contained analysis from the Property Council of Australia (PCA), which claimed that Australia’s


Auction clearances highest on record

The national auction clearance rate set an all time record over the weekend, although volumes were low on account of Anzac Day. The preliminary national clearance rate was an unprecedented 84.3%, up from the 79.2% recorded last weekend, according to Core Logic-RP Data, from RP Data: Sydney’s clearance rate surged 2.8% to 91.1%, whereas Melbourne’s


RP Data weekly housing market update

Click to view Core Logic-RP Data’s latest weekly housing market update, which provides a useful snapshot of the housing market as at 26 April 2015. This week’s report includes: Latest weekly dwelling value results; Auction results & clearance rates; Latest median house & unit prices; Average time on market & vendor discounts; Mortgage market activity;


Five drivers threaten Aussie dollar breakout

It’s not really the news that the RBA wants to hear but in the short term the Australian dollar is threatening to move higher according to MB’s five drivers model of valuation. The five drivers are: interest rate differentials; global and Australian growth (more recently this has become more nuanced for the Aussie to be


Gina: Nobody saw iron ore crash coming

It had to be said, I guess, from the SMH: “None of us predicted it would be as bad as this,” Mrs Rinehart, chairman of Hancock Prospecting, said on Friday at a mining industry lunch in Sydney. “Nobody was predicting – even the most conservative ones – the ore price crash.” Of course it’s not even remotely


Daily iron ore price update (melt-up)

Here are the iron ore charts for April 24, 2015: Now that’s a melt-up. Qingdao spot went through the roof and Tianjin benchmark surged 5.9% to $57. Paper markets have gone berserk with Singapore 12 month swaps playing catch-up while Dalian jumped solidly but then hit the nitrous oxide Friday night ending up another 5%


Daily LNG price update (stockpile)

Brent oil rallied to a new high of $65.40 Friday. The main causes were some short term supply disruptions in Libya and further declines in the US rig count down 22 to 932: The falls are definitely beginning to flatten out but the US shale production peak is also in sight.  But for how long? With