Weekend Links 28-29 May, 2016

Moon Over House, undated, Desmond Digby (New Zealand, Australia, 1933-2015), Art Gallery of NSW   China China plans rise in government debt to prune corporate red ink – SCMP Bogus property owners scam millions from Hong Kong buyers and banks – SCMP…is there a secondary Market for foreign properties in China?… China industrial profit growth

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ASX at the close

Angus Nicholson for Chris Weston, Chief Market Strategist at IG Markets ASX Value Digger Report The ASX is at an increasingly precarious point in valuation terms. Looking at its forward price-to-earnings ratio (page 2), it is now reaching levels that have often resulted in sharp corrections. However, if one looks at the forward EPS estimates


AFR discovers Mining GFC, declares it over

A good piece from Patrick Commins at the AFR today: Is an upcoming rate rise in the US about to help spark the next emerging market mini-crisis? Some analysts think so. With the quasi-panic of January and February fresh in our minds, analysts at Morgan Stanley this week caused waves with a provocative piece of research titled


Fitch: “I wouldn’t call [banks] safe and solid”

From the ABC [my emphasis]: Fitch has warned Australia’s major banks are facing increased risks and bad debts, with one of the credit rating agency’s analysts declining to call them “safe and solid”. In a world of carefully crafted, cautious messages, Fitch ratings director Andrea Jaehne cut to the chase when asked why Australia’s banking


Realtor: Melbourne apartments crash by a quarter

By Leith van Onselen Another day, another warning of apartment oversupply leading to falling prices. From The AFR: Apartments in Melbourne’s Docklands, CBD and Southbank are being resold up to 24 per cent below their previous off-the-plan purchase price, catching out vendors, many of whom bought them from investment companies or spruikers… Bruce Warburton, a


Labor’s negative gearing policy can help rebalance economy

Cross-posted from The Conversation: The Real Estate Institute of Australia (REIA) has unleashed the hounds on Labor’s proposed reforms to negative gearing. The REIA’s campaign, Negative Gearing Affects Everyone, follows the lead of the Property Council, which describes the Australian housing market as a “house of cards”, with the REIA stressing how “fragile” the Australian


More backlash from London’s empty towers

By Leith van Onselen I wrote yesterday how the new mayor of London, Sadiq Khan, had spoken-out about foreign investors using homes in London as “gold bricks for investment” following an investigation which found that the UK’s tallest residential skyscraper is now more than 60% foreign-owned and is under-occupied. Now The Guardian’s Simon Jenkins has


Cormann: Dont’ trust ALP think tank, trust REIA

Lol: Finance Minister Mathias Cormann has ridiculed modelling backing Labor’s policy of restricting negative gearing to new properties from July next year and abolishing John Howard’s capital gains tax discount. The modelling – prepared by the union-backed McKell Institute think-tank and splashed across Fairfax newspapers today – predicts the policy would slow short-term house price


Inside Australia’s capex smash

From Morgan Stanley: Capex data for 1Q16 came in largely in line with our estimate of a substantial decline, which looks set to continueata-20%+ rate through FY17. Weremain concerned abouta”double-unwind” of capex and housing over 2016, and highlight our recent shift to a 1% trough for the RBA cash rate. Second take on FY17 still bleak: Today’s 1Q16 capex


Trump declares war on planet

From NBC: In a rare prepared speech, Donald Trump outlined his energy policy in Bismarck, North Dakota. Trump is known for bucking conservative orthodoxy but, on Thursday, the presumptive Republican presidential nominee largely hewed to the typical Republican line. Reading from a teleprompter, Trump called for reducing restrictions on energy exploration, opening up more federal


The ruinously partisan gas debate

There’s more weird gas debate today at The Australian from Robin Batterham who was president of the Australian Academy of Technological Sciences and Engineering (2007-12), Australian chief scientist (1999-2005) and Rio Tinto Group chief scientist (1999-2009) Last week Labor sparked a debate about gas supplies when it unveiled plans to introduce a national interest test for large


Stop conflating population ponzi with refugees

By Leith van Onselen Sustainable Australia Party NSW Senate candidate, William Bourke, has penned a great piece  calling on politicians and the media to stop conflating the issue of immigration with boat people and asylum seekers, given the overwhelming majority of new arrivals are economic migrants arriving here by plane: Given the hyperbole around boats


Mining GFC meets “fight the Fed”

The US dollar eased back last night after it’s solid run: Yen and euro rebounded: Commodity currencies too: Brent could not hold $50: Base metals tried to lift: Miners were mixed: US and EM high yield fell back from a threatened breakout: The fanciful decoupling trade of “fighting the Fed” took a little breather and


China’s housing bubble enters final phase

Cross-posted from Investing in Chinese Stocks. China’s real estate market has entered the greater fool stage, be on alert for sudden drop says the headline. Centaline is out with a new report showing what has been a hot topic of late, the appearance of “land kings” (winning bidders who pay the highest price on record