February 13 links: Bank blather

  


United States

  • Youth unemployment highest since WWII. Time
  • Income bugs the consumer. Reuters Yep
  • Week ahead for the Dow. Calculated Risk
  • Magazine cover indicator screams sell. Barrons
Europe
Asia
  • China tells banks to roll dodgy debt. FT
Local
  • The Campaign for National Ignorance ramps up. Nasty, neeeeargative media.
  • Sydney auction clearance rate collapses. SMH But don’t worry, increased supply of auctions shows a healthy market. And no doubt WWIII would be good too. Put these two stories together for a good laugh.
  • Other banks to hike. SMH
  • RBA bailed out BankWest. SMH
  • Insolvencies jump. The Cupboard
  • Jennings hammered. The Cupboard
  • RBA didn’t cut because jobs are booming. David Uren Today’s must read. This is surely a leak which is interesting in itself. I could and have lined up a much bigger number of other marginal indicators showing the jobs market is worse than it looks.
  • Bank bills best rate predictor. AFR
  • Markets star predicts doom for boom. AFR
  • Bouris and Joye argue beautifully that the banks should pay. AFR And they’re right. But their solution – guarantee – everybody, including themselves, like Canada – is very disturbing. Canada also has a housing bubble. Moreover, call a public inquiry instead of letting the interests hog the debate.
  • Magazine sales plummet. AFR

Comments

  1. And Gottliebsen is back with his greatest hit – the government should not only be guaranteeing our banks’ debt, it should actually be borrowing for them!

    “Overseas investors are scrambling to buy Australian government paper and the government can borrow at much lower rates than the banks. Swan should be ready to tap that market and fund maturing overseas bank borrowing at much lower rates.”

    http://www.businessspectator.com.au/bs.nsf/Article/RBA-interest-rates-Wayne-Swan-employment-jobs-pd20120213-RERQU?OpenDocument&src=sph

    • They almost raised interest rates around the April-July period of 2011 but thanks to the stand of Business Spectator and later Westpac economist Bill Evans, they were saved from making a major error. I have stepped back because the Reserve Bank began lowering rates
      .
      Delusions of grandeur much?

      • “Delusions of grandeur much?”

        Not the worst I’ve seen – he has actually credited himself directly in the past.

    • Yep. That’s one way of shifting the private debt onto the public balance sheet.

      The problem is I think the government is probably stupid enough to do it. And even if we change governments.

    • The amount of critic-free air time that Bouris and Joye are getting to talk their own books is, quite frankly, amazing.

  2. The Campaign for National Ignorance ramps up. Nasty, neeeeargative media.

    Sydney auction clearance rate collapses. SMH But don’t worry, increased supply of auctions shows a healthy market. And no doubt WWIII would be good too. Put these two stories together for a good laugh.

    And you actually think this rag can get worse if Rheinhart owns it?!?!

  3. Bouris and Joye argue beautifully that the banks should pay. AFR And they’re right. But their solution – guarantee – everybody, including themselves, like Canada – is very disturbing. Canada also has a housing bubble. Moreover, call a public inquiry instead of letting the interests hog the debate.
    .
    CJ conveniently forgot to mention the moral hazard from his side of the business – $20 billion of taxpayers money (via AOFM) used to purchase private RMBS issues. If there is a haircut on these investments, who is going to make the taxpayers whole again? CJ?
    .
    Also, local vampire squid turned Jelly fish, Maq Bank is also an ADI and CJ’s employer/business partner – they were the first to be protected with a ASIC ban on shorting their stock. And I believe they started up an entire division to exploit and profit from the government guarantee.

    • Also, reportedly, Bouris wants to turn Yellow Brick Road (which Joye is now also a part of) into a bank. Therefore, it is both a bit unsurprising and a bit disconcerting that both are bleating very publicly about taxpayer guarantees for the small banks.

      Regarding the moral hazard – I don’t think they understand the term (like Gotti).

  4. Gittins! in 1989 – “It is imperative that we fix the balance of payments and halt the inexorable rise in our debts to foreigners…”

    http://inside.org.au/the-debt-truck-crunches-its-gears/

    Gittins! in 2012 – “(The other thing we ought to be thankful for apart from our luck is 20 years of clearly superior management of our economy. In stark contrast to Europe and the US, we have well-regulated banks and stuff-all public debt.)”

    http://www.smh.com.au/business/numbers-are-up-but-gloomsters-still-on-a-downer-20111209-1onoo.html

    It’s a good thing that we only need to worry about bank regulation and public debt these days. Pesky things like private debt held by foreigners don’t matter any more.