Links – Wednesday 30th May

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Here is some stuff Reynard the Fox, and our readers (see comments) found interesting last night.

Global Macro:

United States:

  • Failbook continues to impress -down nearly 10% overnight to below $29 per share Bloomberg
  • US consumer confidence falls to 8 month low BBC
  • The decline of US Shadow Banking charted FT Alphaville great post
  • US house prices – rebounding for 3rd time or falling? Case-Shiller HPI says yes to both: Calculated Risk h/t Dr Bob
  • The JPMorgue Whale of a Trade – sells bonds to cover the losses Reuters compounding is a bitch h/t A63

Europe:

  • Spanish retail sales dive BBC
  • UK house price drop confirmed BBC
  • EZ bank safety net leaves holes unplugged MacroScope
  • Survey shows big gap between Germany and Greece Spiegel Online see video at bottom….
  • Those crafty Germans: debtors to pawn debt for Gold collateral The Telegraph h/t The Bullion Baron
  • National Bank says Grexit would mean 55% drop in income Bloomberg
  • Eurobond or bust! MacroScope

Asia:

  • Official Chinese news agency: No plans for any large scale stimulus Bloomberg win The Australian FAIL
  • Show me the money!!! WSJ on the Chinese “stimulus”
  • Sinostriches! MacroMan on the Chinese “stimulus”
  • Show me more money!!! Migrant workers riot in eastern China FT (Login)
  • Too much money!!! Malinvestment in China is the problem The Economist
  • Japan and China to directly trade Yen-Yuan WSJ  interesting…

Local:

  • How safe is your super? AFR interesting, I guess. Not sure why most non BB bother with super..
  • Still can’t stand reading much more local dross from The Cupboard/The Lite Cupboard (AFR) and Fairfax, go and have a look yourself

 

Interesting/Other stuff:

  • How the retail investor was lost forever The ArmoTrader this is very good and visually illustrative
  • Must read from Bronte Capital on Failbook IPO
  • Continuing the space theme: Can you spot inequality in space? Decisions Decisions h/t Rumplestatkin
  • and again….how about a German Star Trek?
And have a nice day!

Comments

    • Cheers – got email too ta.

      Had to add that German Star Trek.

      Also reminds me of a German joke:

      German: “Knock? Knock?”
      Other (Greek?)”Who’s there?”
      German: “ONLY VE ASK ZE QUESTIONS!!!! VERS IS UR GOLD???”

  1. A couple of things:

    a) “Not sure why most non BB bother with super” What do you mean by “BB”? Bogan breeder?

    b) The inequality from space thing … The difference in leafiness has been noted many times in the past. The best explanation is that people in jobs where they have a high degree of autonomy and/or have financial security, face a less threatening world around them, and so feel okay about having trees and a bit of chaos in their gardens and streets.

    However, people in jobs that offer no personal control (e.g. assembly line), or who have no financial security, will seek control in some aspect of their lives. Their yards tend to reflect that need for control.

    Even apart from wealth, I see this in our street. The houses of those who came here from the post-war Europe tend to have very (obsessively?) orderly, well-maintained yards and gardens. Those of us who were born here, and have not know war and its consequences, tend to have rather more free-form landscaping.

      • Ah, thanks.

        Being younger than a BB, I’ve pretty much ignored super anyway. My reasons are:

        * I do not know how the law will change in the future, but experience tells me it won’t be in my favour.

        * If one reaches a certain level of savings outside of superannuation, it is possible to live from that, or to be rather carefree in what employment one pursues. However, if that same amount of money is partly in superannuation and partly outside, then my freedom concerning what I do with my time is diminished.

        * The idea of living for at least a good chunk of the year in Thailand is appealing, and quite possible given that the Kingdom issues retirement visas to people from 50 years old. Superannuation won’t let me do that. Even were I to marry a Thai, move to Thailand, sell all my Australian assets and burn my Australian passport, there is no guarantee that I would be allowed access to my money until the government says I can.

        Which brings me to … seeing some of those fraud articles, and government agencies warning SMSFs that they aren’t protected against fraud, one wonders whether ‘fraud’ 😉 might not become a common means for money to leave superannuation before the statutory age O.o

      • good way of framing it e-girl, in fact I’ll frame my next post about super (its been awhile, been dreadfully busy) that way too.

        Too much financial media attention is on SMSF/superannuation – but for Baby Boomers (I’m not saying they shouldnt get the attention, to be clear).

        How is the 35 year old with a $400,000 mortgage and 2 kids (with education costs rising 6% pa on average) and private health insurance (rising 7%pa on average) going to put enough money away – or time – for his/her retirement?

        The 12% SGC wont help, IMO, its too little, too late for the so-called “echo” boomers (i.e late Gen X like me).

        I sometimes wonder why I bother managing my own super, even though I’ve doubled it since the GFC. I guess for bragging rights – I cant touch it for another 25 years, at least.

        Although NZ agricultural property is something to think about…..

      • Faced with letting a big super company loose your money, or managing your SMSF then you’ll be better off IMO in a SMSF. In my case I got 2% average return over 16 years, and bailed to a SMSF, and I’m well up, but it will take a few years yet even to recover what the experts lost for me. The only thing with SMSF I can see is more regulation to make it impossible for someone like me stay in it. It could come in the form of more onerous auditing, or tax. I might benefit in 25 years as well, but the jury is still out.

      • there has been scuttlebutt that SMSF Trustees would be made to be either RG146 compliant (i.e have to complete a Diploma level course) or must have an RG146 compliant financial advisor “on the books”, i.e be an official client of an FP practice. Accountants dont like this, obviously.

        Given the Australian proclivity for requiring a license to do anything, it will likely dawn on the regulators that 1/3rd of superannuation is being managed “without” the “proper” qualifications…

        Then there’s the move by retail and industry super funds to operate “SMSF” like funds (including overdue term deposit options), but I still think there’s a big bunch of non-BB who want independent advice and a bit more sophiscitation (even if the strategies are simple) on getting the best out of super.

        Because, by Dog, I don’t know how the average Gen X/Y is going to save additional funds and be able to make contributions to their retirement with the huge debt overload (relative to their parents) and rising cost of living (relative to their parents) pressures, so they need to extract every ounce of performance- NOW – to take advantage of compounding – out of their super…

      • Scary, yet this never gets oxygen. That’s why I think we’ll need to be off grid for energy for a start should we make it to retirement. Maybe we’ll need to sell the family home as well if we have one. A cycling friend’s mum, just retired, and is going crazy seeing what’s happened to her super (one of the big ones), and she worked for them for 20 years; she’s feeling betrayed. Not everyone has a McMansion to sell and live off so this is going to be an issue.

      • How is the 35 year old with a $400,000 mortgage and 2 kids (with education costs rising 6% pa on average) and private health insurance (rising 7%pa on average) going to put enough money away – or time – for his/her retirement?

        I actually think you know the answer.

        But one point is ‘what does retirement entail’.

        Had another spruik in my workplace about how ill pre-prepared boomers are for retirement.

        They had claims of ‘modest retirement being $35,000 p.a. for a couple’, being expressed as quite frugal.

        A comfortable retirement being $55,000.

        Again, I question how entitled do the baby boomers feel.

        Average household income is what $87k per per year, based on ABS 6502.0 being average wage of $54.4k, and 6532.0 having 1.6 wage earners per household.

        That makes sense, primary wage earner, F/T on $54k, pays $10k tax.

        Secondary wage earner, works P/T for $30k, pays $3k tax

        Take home =$73,000, will all the outgoings of the likliehood of paying a motgage and raising kids. There isn’t a lot of discretionary spending left, for those that actually are brining product to market.

        One has to think that a ‘comfortable’ income stream is tax exempt.

        $55k when you should have a discharged mortgage and an empty nest is a lot of food and water rates. I mean $55k is a lot of discretionary spending.

      • VG points RP, and yes I’m spruiking, guilty as charged.

        And yes, I do question the notion of “work til 65, STOP, live off a pension” type retirement, but that’s what we’ve chosen.

      • Rg146? have you guys reviewed the crap in this course? Asset allocation is king, shares outperform etc etc.
        Serious, a major issue is even the preferred courses are rubbish.
        Just some thoughts but currently it’s the blind leading the blind.

      • Rg146? have you guys reviewed the crap in this course? Asset allocation is king,

        Well there is reams of information that points out that in a diversified portfolio that sector allocation have much more of an impact in overall return that individual asset selection.

        I agree, if you have great foresight, then single asset portfolio is the way.

        I.e. Then plan you make if you can get it right.

        Most people will admit that they can’t get it right, and that’s what a diverse portolio is for.

        shares outperform

        In investment timeframes of 2 to 4 cycles, it is hard to argue with that in a historic sense.

    • A lot of people in my area hid from the nazis in forests, often living there. For extended periods. Their gardens are very,very tidy,and clipped meticulously.