Are the chickens getting restless ?

We detect a bit of worry falling over the Australian market place. Yesterday we saw a fair fall in the ASX on the back of not much at all. China did a bit of tightening on its lending, but then the banks in China came out and said they have been pouring out credit anyway.

China’s total lending in September – including loans from smaller commercial banks – may reach 500 billion yuan, far exceeding a previous estimate of 280 billion yuan, based on the government’s full-year lending target and banks’ normal pace of lending, the paper said.

The AUD is having a bit of trouble getting over the .99c hump versus the USD, and every time there is even the smallest piece of news there is a noticeable drop, which from our perspective shows the carry traders are getting nervous.

Then there is the Australian property market that seems to be coming more
unstuck by the day. Apart from the vested interest dribble spewing from QBE (a mortgage insurer) and BIS Shrapnel , everyone else , even the perma-bulls , are going bearish. Lets not forget housing is banking in Oz, so obviously the Oz banks aren’t going to come out and say they can see the risks. But we think there is lots of chatter in the backrooms about what to do next. The current trends in prices and mortgage issuance have certainly got to be worrying them.

Didn’t BIS just predict a boom in Perth ?

The currency war is still heating up and there is forclosuregate bubbling along in the background with those unresolved toxic assets ready to leap out and attack the US banking system at anytime.

The only good news seems to be undirected government spending via Quantitive Easing. And that is the worry; if undirected money creation is the best news of the day how good can things really be?

Maybe we are reading the tea leaves wrong, but the chickens seem very nervous to us.

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  1. I got dragged to a property investment seminar recently. I was surprised and not to hear that we are due to for more price growth in some states and that property will continue to double every 7 years. A cycle of boom and "slow growth' was mentioned too.

    It's sickening… the whole mess that is and that will be.

  2. I'm a renter, making lowball offers on places. I think nothing of offering 30% less than asking. No takers yet, but it's only a matter of time….

  3. Economic Delusion

    Had a discussion with a RE agent today who told me his high end clients are taking their houses off the market and waiting for a "better time to sell".

    Our reply: "Good luck with that".