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Iron ore lobby dies with juniors

From the SMH: The Magnetite Network, which was formed in 2009 to represent the interests of Atlas Iron, BC Iron, Citic Pacific Mining, Karara Mining and Asia Iron Australia, has suspended activities as its member companies cut costs amid weak iron ore prices. “Just like a mine site that goes on to care and maintenance

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Wealthy collecting $10b super tax free

By Leith van Onselen The Association of Superannuation Funds Australia (ASFA) has today released new research showing that wealthy retirees are collecting $10 billion worth of income tax free, courtesy of the Howard Government’s short-sighted decision in 2006 to scrap taxes on the retirement income from super. According to this report, there are over 200,000 people

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Engineering construction levitates above mining cliff

By Leith van Onselen The ABS has released engineering construction data for the December quarter of 2014, which revealed a 0.6% seasonally adjusted fall in the value of work done over the quarter, a 12.4% fall over the year, and an ongoing reduction in the construction pipeline. According to the ABS, private sector engineering construction

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Bassanese: Iron headed for $25

From David Bassanese: If you think the current rout in iron ore prices is bad enough, I have some potentially troubling news for you: by long-run historical standards, prices still appear relatively high. The implicit assumption from both the Federal Government and commodity analysts in recent years was that “this time is different”. Almost everyone

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China PMI flops into expansion

The second of China’s PMIs (the official version) is out for March and did better than the private HSBC measure managing to flop over the line into expansion up 0.2 points to 50.1. Output jumped to 52.1 but new orders remain subdued at 50.2 and new export orders are contracting at 48.3:   Hardly spectacular and

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How Howard expanded the negative gearing “tax shelter”

By Leith van Onselen Following the release Monday of the Australian Treasury’s discussion paper on tax, there has been lots of calls for the Abbott Government remove the 50% discount on capital gains tax (CGT), which has overwhelmingly benefited the rich by creating a tax shelter via, among other things, negative gearing. Here’s an example

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How to generate a RIO “buy”

Big iron is again outperforming on the stockmarket today even as its business dissolves. Let’s take a look at how this magnificent fiction is achieved. Deutsche has just cut its iron ore prices to $51 for 2015 and $60 for next year and today recommended RIO as a buy (not picking on it especially): After

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Lateline hammers TPP trade sell-out

By Leith van Onselen Last night, ABC’s Lateline dedicated an entire program to the Trans-Pacific Partnership (TPP) – the US-led trade deal being negotiated between 12 Pacific Rim nations, including Australia. The first segment showed how interests within the US political system – particularly the Democratic Party and unions – are opposed to the TPP,

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Dad’s Army slams macroprudential

The new commentator at Dad’s Army, Miranda Maxwell, takes on macroprudential todayand gives it a panning: New Zealand’s experience with home loan limits is a cautionary tale. There, loan-to-value ratio ‘speed limits’ were introduced in October 2013 and dictate that banks limit residential mortgage lending at a LVR greater than 80 per cent to no more than 10

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Formatting troubles with new site?

I’ve had a number of inquiries asking for help on formatting problems with the new theme. We’re working through many of your kindly suggestions but if the posts are not updating on your screen or there the formatting is amiss then clear your browser cache. That will solve most problems.

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Competition review targets pharmacies, taxis, planning

By Leith van Onselen The final report of the Harper competition policy review has been released and urges the government to free-up rules preventing competition in the the pharmacy and taxi industries, as well as in the delivery of urban land supply. On pharmacies, the report recommends dumping pharmacy location and ownership rules: The current

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Macro Morning: Risk awf

By Chris Becker Risk markets flopped last night even as German unemployment went down, UK GDP surprised on the upside but EZ CPI indicated a further slip into deflation across the continent. The moves down were probably end of month and quarter repositioning with no macro or central bank talkfests catalysts providing an answer. To

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FMG, BHP apply for mine expansion permits

From The Australian: As iron ore prices threaten to slip below $US50 a tonne and Andrew “Twiggy” Forrest calls for production restraint, his Fortescue Metals Group and BHP ­Billiton have each applied for state government approval to boost iron ore output. In separate applications to the West Australian Environmental Protection Authority in recent weeks, the

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Manufacturing PMI booms!

April fool! The manufacturing recession rolls endlessly on and really is the butt of all jokes: The Australian Industry Group Australian Performance of Manufacturing Index (Australian PMI®) moved up by 0.9 points to 46.3 points in March (seasonally adjusted). This indicated a fourth consecutive month of contraction in activity (readings below 50 points indicate contraction) across the manufacturing sector

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Au revoir Australian dollar safe haven?

The IMF has released its Commitment of Foreign Reserves (COFER) update for Q4 2014 and it registered a big fall:   The 5.2% fall was the highest among all of the currencies tracked by the IMF but is roughly equal to the fall in value. I expect central banks to remain leery given the notion that

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SQM: No national housing bubble

By Leith van Onselen SQM Research’s managing director, Louis Christopher, released his weekly email newsletter last night, which once attempted to dispel the notion that Australia has a housing bubble: I’ve noticed increasing media chatter about a national housing bubble that we apparently have, here and now! Let me tell you it’s wrong to take

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Melbourne: Lord of the population ponzi

By Leith van Onselen The Australian Bureau of Statistics (ABS) yesterday released its Regional Population report for the 2013-14 financial year, which revealed that Melbourne remains king of the population ponzi, adding a whopping 95,700 people (an MCG’s worth) to its population in 2013-14, representing growth of 2.2%: The highest rate of growth, however, was

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RIO’s profits are being smoked

As iron ore plunges so too does RIO’s outlook whether markets are pricing it or not. On a spot price scenario, RIO’s iron ore margin is now down to mid teens:   Pre-tax profits are 35% below consensus for this year and below half in later years:   And the idiocy spread is as wide as

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Daily LNG price update (US boom)

The Brent oil price fell overnight to $55.30. The main driver is the wait for the outcome of the Iran deal. More on that is available here and here. I’ll be surprised if talks fail but we shall see. In other news, US shale is powering on, from the FT: US independent oil and gas companies have