Aussie shares flatline in 2014

ScreenHunter_5657 Dec. 23 14.59 From CommSec: In 2013, the Australian sharemarket recorded above-average growth with the All Ordinaries up 14.8 per cent and ASX 200 up 15.1 per cent (20-year average +6.8 per cent). In 2014, there has effectively been a ‘reversion to mean’ (or average) with Aussie shares up by around 1-2 per cent. A key reason for the softer performance has been lower commodity prices, weighing on the resources sector. With a few days of 2014 left to go, it appears that the Australian sharemarket will finish a little below the half-way mark of global sharemarkets. Argentina, China and Venezuela have been the...
read more

Lower consumer anxiety might not benefit retail

ScreenHunter_01 Sep. 06 07.42 By Leith van Onselen NAB has today released its quarterly consumer anxiety index, which fell to 60.1 points in the December quarter, down from 62.3 points in the September quarter (see next table). Cost of living and government policy are claimed to be the biggest causes of anxiety for Australians, whereas perversely job security is causing the least stress, despite the steadily deteriorating labour market. However, the reduced levels of stress are unlikely to translate into improved retail sales, according to NAB chief economist, Alan Oster: "The anxiety index is better but it is mostly...
read more

BIS backs bank “capital floor”

ScreenHunter_5644 Dec. 23 12.16 By Martin North, cross-posted from the Digital Finance Analytics Blog The Bank for International Settlements (BIS) has just released a proposal to strengthen the existing regulatory capital standards for discussion. This is one of a number of initiatives which are all driving capital requirements higher. The proposed Revisions to the Standardised Approach for credit risk seek to strengthen the existing regulatory capital standard in several ways. These include: reduced reliance on external credit ratings; enhanced granularity and risk sensitivity; updated risk weight calibrations, which for...
read more

First home buyers’ dreams fading away

ScreenHunter_01 Jan. 27 23.41 By Leith van Onselen Bankwest has released its 2014 First Time Buyer Deposit Report, which reveals that the dream of home ownership is slipping away from first home buyers (FHBs), with the number of years taken to save a home deposit increasing further in 2014: ...the average first time buyer (FTB) couple would need to save for 4.1 years in order to raise a 20% deposit to buy their first home. This is based on a combined average salary of $110,997 for two people aged 25-34, saving 20% of their pre-tax income in an high interest online savings account, and including any first time home owner grants,...
read more

Where is the Government’s moral compass?

ScreenHunter_5641 Dec. 23 11.09 By Leith van Onselen In a cruel twist, the Abbott Government has informed a broad range of welfare agencies that they will no longer receive federal funding: [The Department of Social Services] yesterday informed a range of welfare support groups that their funding had been abolished. Organisations losing funding include Blind Citizens Australia, the Australian Federation of Disability Organisations and homeless bodies such as National Shelter and the Community Housing Federation. According to Fairfax, funding to the homeless and the low-income housing sector will be particularly hard hit by...
read more

O’Dwyer vows to close foreign investor loopholes

ScreenHunter_4459 Oct. 13 10.08 By Leith van Onselen Fresh from her role as chair of the parliamentary inquiry's report into foreign investment in Australian real estate, which recommended a raft of sensible reforms to Australia's foreign investment regime (summarised here), Liberal MP, Kelly O'Dwyer, has been promoted to Parliamentary Secretary to the Treasurer. As often occurs following such parliamentary inquiries, the members involved in drafting the recommendations move one, and the inquiry drifts from view, consigned to the dustbin of history. Not so with Ms O'Dwyer, who has vowed to close the loopholes that have enabled...
read more

Defer, don’t cut, renewable energy target

ScreenHunter_5640 Dec. 23 10.29 Cross-posted from The Conversation: The Climate Change Authority has recommended that the government move back the deadline for the large-scale Renewable Energy Target by three years, from 2020 to 2023, rather than risk jeopardising investment by reducing the target itself. The recommendation was made in one of two reviews released by the authority today, covering two climate policies: the Renewable Energy Target (RET), and the now defunct Carbon Farming Initiative (CFI) together with its successor, the Emissions Reduction Fund (ERF). Renewables: defer, don’t cut The CCA’s key...
read more

Daily iron ore price update (new lows)

ScreenHunter_07 Nov. 26 16.13 Here are the latest prices and charts pertaining to the iron ore complex. It was a bad night, with spot (Qingdao), 12 month swap, futures and steel prices (Rebar) all falling, with spot and steel prices both plumbing fresh 5-year lows: Bloomberg provides some texture: “The falling price this year has been far deeper than anyone anticipated,” Andrew Hodge, an analyst at Wood Mackenzie Ltd. in Sydney, said before today’s prices were released. “China has had weaker than expected demand from its own residential property sector. For the big three, they have the lowest cost...
read more

Why “Mad Adam” is wrong on the Aussie economy

ScreenHunter_29 Aug. 22 11.42 By Leith van Onselen It seems you can't keep a good perma-bull down. "Mad" Adam Carr today has penned another post in Business Spectator seeking to "unmask the income recession myth", pointing to among other things, Australia's record housing wealth: One of the most interesting features of the Australian economy is just how dour everyone appears to be. It’s bizarre, especially when you note that our key economic stats show things are very good. We’ve got an economy running at trend, a very low unemployment rate and prospects remain bright. The economic fraternity however, finds it almost...
read more

More on WA’s Budget delusions

ScreenHunter_5566 Dec. 19 07.24 By Leith van Onselen The more I examine the Western Australian Government's Mid-year Financial Projections Statement, released yesterday, the more delusional it seems. I noted yesterday how the WA Treasury's iron ore forecasts remain hopelessly optimistic, and will likely lead to further significant revenue downgrades as the iron ore price undershoots. Today, I want to instead focus on the State Government's forecasts for real state final demand (SFD), employment growth, unemployment and population growth, which appear to come out of Oompa loompa land. These forecasts are presented in the next...
read more

Falling oil price to boost global growth

ScreenHunter_5444 Dec. 12 10.59 By Leith van Onselen IMF economists, Rabah Arezki and Olivier Blanchard, have penned a useful primer on oil prices, which argues that the heavy slide in prices could help to boost global economic activity by up to 0.7% next year, but that the impact will be vastly different across economies. The key points of the report are as follows: Overall, we see [plunging oil prices] as a shot in the arm for the global economy... we find a gain for world GDP between 0.3 and 0.7 percent in 2015, compared to a scenario without the drop in oil prices. ...oil importers among advanced economies, and even...
read more

Could an Energy Bust Trigger QE4?

ScreenHunter_5620 Dec. 23 07.28 By Peter Schiff, cross-posted from Euro Pacific Capital Inc In a normal economic times falling energy costs would be considered unadulterated good news. The facts are simple. No one buys a barrel of oil to display above the mantle. No one derives happiness from a lump of coal. Energy is simply a means to do or get the things that we want. We use it to stay warm, to move from Point A to Point B, to transport our goods, to cook our food, and to power our homes, factories, theaters, offices, and stadiums. If we could do all these things without energy, we would happily never drill a well or build a...
read more

Links 23 December 2014

ScreenHunter_01 Apr. 02 06.19 Global Macro / Markets / Investing: Why Saudis Decided Not to Prop Up Oil - Wall Street Journal Seven Questions About The Recent Oil Price Slump - IMF Is There a Future for Credit Default Swap Futures? - New York Fed The $6.3 Trillion Bidding Frenzy That Vanquished Treasury Bears - Bloomberg Why Bitcoin’s Erratic Price Doesn’t Matter - Wall Street Journal Ready for $20 Oil? - Bloomberg View Oil Shakes Venezuelan Debt to Its Foundations - Wall Street Journal Saudis See Oil Recovery as U.A.E. Urges Non-OPEC Cuts – Bloomberg North America: If energy prices remain near...
read more

ASX at the close

ScreenHunter_31 Jun. 04 16.42 Stan Shamu for Chris Weston, Chief Market Strategist at IG Markets ASX 200 trades at four-week highs Equities have picked up where they left off on Friday with a rally across the region. The ASX 200 has been a standout after weeks of underperformance. The return to strength of the energy space has driven the gains as investors speculate on crude oil prices. After seeing a rebound on Friday, many have been calling a bottom in oil prices and feel this is a beginning of a recovery. With Saudi Arabia pledging its commitment to seeing stability in oil prices, many took this as a catalyst for a...
read more

WA’s delusional iron ore forecast sinks Budget

ScreenHunter_07 Nov. 22 08.59 By Leith van Onselen The comedy act that was the 2014-15 Western Australian State Budget, which delusionally forecast high iron ore prices as far as the eye can see, along with surging royalty revenue (see below table and chart), has finally been exposed, with the State Government's Mid-year Financial Projections Statement revealing a $1.6 billion downgrade in Budget revenues in 2014-15, and an unprecedented $5 billion downgrade over the forward estimates period (2014-15 to 2017-18). According to the Statement: Notwithstanding strong growth in exports (with Western Australia accounting...
read more

Petrol prices in biggest fall for six years

ScreenHunter_04 Sep. 23 15.14 From CommSec: According to the Australian Institute of Petroleum, the national average Australian price of petrol fell by 4.0 cents per litre to a 4-year low of 128.4 cents a litre in the week to December 21. The fall in the petrol price over the last month was the biggest decline for an equivalent period in 6 years... Today, the national average wholesale (terminal gate) unleaded petrol price stands at a 4-year low (lowest since October 4 2010) of 112.18 cents per litre, down 4 cents a litre in the past week. The terminal gate price has fallen by over 17 cents a litre in the past five...
read more

Online retail sales growth lowest on record

ScreenHunter_5611 Dec. 22 13.14 By Leith van Onselen NAB has released its online retail sales index for November, which registered the slowest sales growth in the index's history, with online sales contracting a seasonally adjusted 0.2% over the month to be up just 3.9% over the year: In dollar terms, we estimate Australians spent $16.3 billion on online retail in the 12 months to November 2014. This level is equivalent to 6.8% of spending at traditional bricks & mortar retailers as measured by the ABS (excluding cafés, restaurants and takeaway food, to create a like-for-like comparison) in the 12 months to October...
read more

Government slashes official iron ore forecast

ScreenHunter_05 Mar. 12 11.39 By Leith van Onselen The Department of Industry, which replaced the now defunct Bureau of Resources and Energy Economics (BREE) as the official commodity forecaster, has heavily downgraded it iron ore price forecast next year to $US63 a tonne, from $US94 a tonne in September. Below are the key extracts from the quarterly report: A rapid increase in the supply of iron ore combined with moderating demand growth in China resulted in the price of iron ore falling 50 per cent in 2014. The price of iron ore (FOB Australia) has averaged US$90 in 2014 but as of mid-December is trading around US$70, the...
read more

A textbook case of bureaucratic waste

ScreenHunter_5604 Dec. 22 11.22 By Leith van Onselen In a story that is befitting an April Fools Day joke, independent Senator Nick Xenophon has unearthed a textbook case of bureaucratic waste and mismanagement, whereby the Department of Human Services has spent at least $500,000 of taxpayers' money in legal fees fighting a child support dispute over $6000. From The Canberra Times: Throughout the three-year legal battle with the father, a determined litigant known simply as "DT"..., Human Services have tried to resist handing over documents to the court and defied orders to release information to the Office of the Australian...
read more

Daily iron ore price update (steel glut)

ScreenHunter_07 Nov. 26 16.13 Here are the latest prices and charts pertaining to the iron ore complex, with small bounces recorded for spot (Qingdao), 12 month swap and futures, but ongoing falls for steel prices (Rebar), which hit a multi-year low: Note from the above that average steel prices (Rebar) have fallen to their lowest level in at least 5 1/2 years. The news comes as Beijing has been found to have routinely underestimated output from its sprawling steel sector, according to the SCMP: Beijing has vowed to cut overcapacity in its steel sector, the world's biggest, but huge discrepancies in the data...
read more

Dog days have arrived for the Australian economy

ScreenHunter_5596 Dec. 22 09.07 By Leith van Onselen Professor Ross Garnaut, whose book released last year entitled Dog Days: Australia after the Boom predicted a prolonged period of falling living standards unless Australia raises productivity and boosts competitiveness by lowering the real exchange rate, has returned proclaiming that "regrettably the dog days scenario [outlined in my book] is playing out very much". From The AFR: “We’ve got a longer period of grind: of falling real per-capita incomes; of underperformance of employment before we get the economy growing at a rate that will start to deal with the unemployment...
read more

Australia hits peak mortgage debt

ScreenHunter_5590 Dec. 19 15.43 By Leith van Onselen The Reserve Bank of Australia (RBA) has released its household debt ratio data for the September quarter, which reveals that outstanding mortgage debt has hit the highest ever level when compared against GDP and household incomes. As shown in the next chart, the ratio of housing debt to GDP was a record 87.7% as at September 2014, eclipsing the previous record high 86.9% as at March 2010 (see next chart). In a similar vein, the ratio of housing debt to household disposable income was a record 139.0% as at September 2014, easily eclipsing the June 2010 peak of 134.7%...
read more

Without revenue, we’ve only half a budget debate

ScreenHunter_64 Jul. 29 15.04 Cross-posted from The Conversation: The missing element in last week’s mid-year economic and fiscal outlook, and more broadly, in current government policy, stares Australians in the face. Revenue needs to be increased. Increasing taxes, reducing tax concessions and eliminating loopholes are all options, which I and other commentators have argued for. For example, journalist Peter Martin has shown that if compulsory superannuation contributions were taxed as income, i.e. like wages (rather than being taxed at a concessional rate) there would be a net gain to the budget of approximately A$12...
read more

Melbourne drives auction clearances lower

ScreenHunter_19 Mar. 13 13.12 The national auction clearance rate fell over the weekend, driven by a big decline in Melbourne. According to RP Data, the national weighted average preliminary auction clearance rate was 64.3% over the weekend, which was down 0.9% from the 65.2% clearance rate recorded last weekend. Sydney’s clearance rate rose by 5.0% to 76.2%, whereas Melbourne’s fell to 61.2% (last weekend 65.9%). Brisbane, which typically only has a small number of auctions, experienced a rise in its clearance rate (up 3.5% to 50.8%). Overall auction volumes (1,622) were down significantly on last weekend’s...
read more

RP Data weekend property market update

ScreenHunter_18 Mar. 18 17.58 Click to view RP Data’s latest weekly housing market update, which provides a useful snapshot of the housing market as at 21 December 2014. 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; and New listings...
read more
Page 1 of 76612345...102030...Last »