Shanghai opens, crashes

Shanghai is open and is down 2% after being down more than 3%: Led by Chinext which is still down 4.5%: Unstoppable. From the AFR: Trading was halted in more than 25 per cent of Chinese listed shares on Tuesday, in what appeared to be the latest government-backed attempt to shore up the country’s plunging

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The population monster that’s swallowing Melbourne

By Leith van Onselen Over the past decade, Melbourne has dominated the nation’s population growth, leading the way in each and every year since 2004 (see next chart). With the Victorian manufacturing sector in decline (and now facing near extinction), the Government in the mid-2000s effectively turned to selling citizenship and immigration to drive economic


Construction PMI recession deepens

The Australian Industry Group (AIG) has released its Performance of Construction Index (PSI) for June, which reveals that Australia’s construction sector finished the financial year in recession, recording a reading of 46.4, down 1.4 points from May: The national construction industry contracted at a steeper rate in June, as weaker engineering activity continued to outweigh


Measuring Port Phillip’s iron ore happiness

Another dubious report out today from an economic consultancy engaged in a rent-seeker’s fight. This time it’s Port Phillip Partners and the customer is RIO and the Minerals Council: The Australian iron ore industry has capitalised on a decade of unprecedented volume and price growth to create a market position stronger after the commodities boom than


Productivity Commission calls for super reform

By Leith van Onselen The Productivity Commission (PC) has joined the conga line of experts – including Financial System Review head David Murray and the Australian Treasury – calling for reform of Australia’s superannuation system. In a research paper entitled Superannuation Policy for Post-Retirement, the PC reiterates how population ageing will greatly increase the demands


EZ gives Greece one last chance, lol

From the FT: Athens will be given a final chance to present a new reform plan to eurozone leaders on Tuesday night despite a hardening attitude to Greece in many capitals after the emphatic rejection of previous bailout terms in Sunday’s referendum. But eurozone officials said leaders were unlikely to agree to restart rescue talks


Why gold is going nowhere

From Miranda Maxwell at Dad’s Army: In a volatile period for global markets, gold has been a nonstarter, failing to sustain a rally this month even as Greece proudly voted for noone-knows-precisely-what, and China’s stock market crashed causing “horror and anxiety.” …Surely that’s a time to embrace a safe haven? Indeed the US dollar hit


Treasury releases foreign investment reforms

The Australian Treasury yesterday released the Exposure Drafts and Regulatory Impact Statement of legislation designed to tighten foreign investment rules, including those relating to residential real estate. On 2 May 2015, the Government announced a package of reforms to strengthen the foreign investment framework, including: stronger enforcement of the foreign investment rules by transferring all


China’s centrally planned stock bubble fail

From Investing in Chinese Stocks comes a great line up of centrally-planned margin lending fails: December 2014: The shadowy trading behind China’s stock market boom This mania for margin trading—which allows individual investors to borrow from the broker to up the amount of their stock bets, magnifying the size of gains and losses—is a new thing.


Links 7 July 2015

Global Macro / Markets / Investing: Why You Should Short Coal – Bloomberg View Oil tumbles 6 percent after Greek ’No’ vote, ahead of Iran deadline – Reuters Beijing Upends the Market – Wall Street Journal North America: Colorado’s Effort Against Teenage Pregnancies Is a Startling Success – New York Times Can America’s Big Banks


ASX at the close

Chris Weston, Chief Market Strategist at IG Markets I am going to be the first to put my hand up and say I expected a much more aggressive reaction to a ‘no’ vote. It has to be said that despite markets adopting a definitive risk-aversion feel, the mood has felt quite calm and there is


Yanis driven out

Fresh from the blog of Yanis Varoufakis: The referendum of 5th July will stay in history as a unique moment when a small European nation rose up against debt-bondage. Like all struggles for democratic rights, so too this historic rejection of the Eurogroup’s 25th June ultimatum comes with a large price tag attached. It is, therefore,


Shanghai crash resumes

Sorry, last one for the day. After launching nearly 8% this morning, Shanghai has now completely rolled over and is in the red: Chinext has been flogged 6%: On previous days this set up has tended to end with SSE capitalution…(by the way, I promise to kick this bust-watching habit).


Chinext goes splat

It’s not exactly high level blogging but China bust watching is fun! Shanghai is barely positive for the day now: As Chinext goes splat, down -4% and below Friday’s lows: How do you say ‘lost credibility’ in Mandarin for Chinese authorities?


Greece mulls printing counterfiet euros

From Ambrose Evans-Pritchard: Top Syriza officials say they are considering drastic steps to boost liquidity and shore up the banking system, should the ECB refuse to give the country enough breathing room for a fresh talks. “If necessary, we will issue parallel liquidity and California-style IOU’s, in an electronic form. We should have done it


Shadow RBA says…

Whatever! In Greece the economic tragedy appears to be in its final act, while dramatic falls in the Chinese stock market highlight the weaknesses of its economy. Domestic economic data is mixed: unemployment has fallen slightly but consumer and producer confidence have weakened. Inflation remains comfortably within the RBA’s target band. The CAMA RBA Shadow