Links 3rd January

They were supposed to be on a break until the 7th, but it looks like a couple of the MB crew couldn’t resist the news-flow any longer. So it’s back to normal programming.. Well at 50% capacity anyway.

Global:

  • IMF: Optimal oil production and the world supply of oil The Big Picture
  • Survival of the zombies is bad news FT
  • Stock to soar as world money catches fire, Calvinist Europe left behind Ambrose

North America:

  • “Fiscal Cliff”: House passes bill, Obama says he will not debate default ceiling CalculatedRisk
  • Bipartisan house backs tax deal as next fight looms Bloomberg
  • The fiscal cliff deal that almost wasn’t Politico
  • Eight corporate subsidies in the fiscal cliff bill, from Goldman Sachs to Disney to NASCAR NakedCap
  • Who are the winners and losers in the bargain between Democrats and Republicans? Slate
  • House fails to take up Sandy aid bill WSJ , NYT
  • US manufacturing PMI comes in strong Markit
Asia:
  • Climate change comes to the Philippines The Diplomat
  • Abe briefs envoy on value of Tokyo-Seoul ties Japan Times
  • LNG gains political value as Japan’s needs soar Japan Times
  • Beijing land prices soar amid criticism FT
Russia:
  • Putins signs law raising age limit for civil servants Moscow Times
  • Russian oil output hits post-Soviet record Reuters
Europe:
  • Euphoria in the banking sector FT
  • German inflation surprises to the upside MNI
  • Spain’s new house prices drop to 2003 levels Reuters
  • Portuguese budget sent to court to assess its fairness BBC
  • France’s new car registrations down 13.9% Y/Y in 2012 MNI
  • UK manufacturing hits 15-month high Guardian UK
  • The Eurozone manages the near-opposite Markit
  • But European peripheral yields continue to fall BI
  • “I’m under fire” – recent interview with Jens Weidmann Bundesbank
  • Six months on, Monti’s labor reform has changed little Reuters
Local:
  • Index of commodity prices December 2012 RBA
  • Reynard struggled to care about local news today, if you see something interesting put it in the comments

Other:

  • Smart fabrics and other forecasts BBC

 

Comments

    • MsSolarFelineAU

      Thankyou for that Ortega!

      Canada’s housing bubble has burst and prices have started to fall. Sales have dipped for 8 straight months as buyer interest has begun to wane. Housing sales in November dropped 12 percent from the same month last year, while previously-hot markets of Vancouver and Toronto saw declines of 28.6% and 16% respectively.

      Take THAT bulls! *snicker* Is this evidence, or what?

      • Careful, MsSolar. The article refers mostly to volumes, not prices. The spruikers can safely disregard the vol metric because Australia’s gifted speculators don’t understand it. Any investor worth her salt studies volume, but our entire aspirational class just goes slack at the mouth at such dimensional complexity.

        Don’t Buy Now!

    • I think There is a fair bit of economic and psychological research showing that debt has the effect motivating employees to sacrifice conditions and pay outcomes…….

      Last time I looked (circa ten years ago) I recall reading that the first response to significant debt for the largest section of society was to sacrifice living outcomes (time with family, vacations etc) rather than revisit the need for the debt servicing commitment – particularly for males – and that deprivation of these living outcomes tends to lead to other life stressors which tend to trigger the revisit of the need for the debt servicing ……

      • It does make one wonder what sort of outcome a real GFC type of enviroment would have for Australia especially considering our obsession with real estate investment.

        It makes me think about how many people will let their kids grow up without a father (because theyre too busy working), how many marriages will fail due to financial stresses all so they can retain their investment property/properties.

        The social implications of any large correction in housing prices and higher unemployment could potentially be dire for a nation that has had 2 solid decades of nothing but prosperity. Many have never experienced a downturn in their adult life and may not know how to cope.

        Our society already has enough issues with alcohol fuelled violence, domestic abuse and alcholism it makes me wonder how much worse it’s going to get when its finally our turn for GFC pain.

        • “It makes me think about how many people will let their kids grow up without a father (because theyre too busy working), how many marriages will fail due to financial stresses all so they can retain their investment property/properties.”

          I can tell you two things from hard experience.
          1. When it is your own family home they are trying to take, if you have fortitude, there is almost nothing you won’t do as far as work goes.
          2. If you’re a decent sort the time you do get with your family becomes really precious and valuable and you try to make the most of almost every minute of it.

    • Talk about biting the hand that feeds you.

      With all the property/real estate industry advertisements on that one article alone it makes one wonder how Chris Vedelago (the author of the article) got this one past the editing staff.

      Makes me wonder if they are preparing for the inevitable drop in housing prices in Melbourne and The Age would like to maintain some sense of credibility in the face of mountains of data that conflicts with their previous narrative of property to the moon.

  1. MsSolarFelineAU

    Even though this is last year –

    http://smh.domain.com.au/real-estate-news/scramble-to-build-more-harbour-apartments-20121228-2bz4x.html

    so, we have an “over-supply” of apartment builds in Sydney CBD/Darling Harbour & Central Park/Frasers Broadway http://www.centralparksydney.com/ and Sydney is all set for what is happening in Melbourne with http://www.theage.com.au/victoria/city-apartment-frenzy-20121230-2c1hm.html#poll

    Can’t wait for the BLOODBATH!

      • reusachtigeMEMBER

        Because many of us, and we are growing in number – check out the poll in the article as loose confirmation, have had enough of the damage caused by high house prices and the associated private debt servicing and believe that only a total bloodbath and total reset will give everyone enough of a hiding that things change, even if only slightly. You and your ilk just can’t understand this desire but it is true and real. We want the whole housing ponzi totally and utterly destroyed. /rant

        • So you relish seeing mortgage holders (like some of my siblings, friends and colleagues – hard working good people) find themselves underwater with mortgages bigger than the value of their properties, with the housing market in freefall, building construction sector in collapse, general misery and mayhem – a veritable bloodbath – so you and others of your ilk can swoop and pick the carcasses of dreams destroyed…

          • The question is 3d1k is the alternative of ever rising housing prices and entire generations priced out of a decent quality of life a better alternative.

            In my opinion as a 25 year old man is no, I would like to be able to afford a reasonably nice house within my lifetime and without a correction in housing prices towards their long term median that will be incredibly financially difficult.

            People may think me selfish for wanting to have affordable housing, really I dont really care what other people think, I just want an affordable place to live for my family.

          • So you relish seeing mortgage holders (like some of my siblings, friends and colleagues – hard working good people) find themselves underwater with mortgages bigger than the value of their properties, with the housing market in freefall, building construction sector in collapse, general misery and mayhem – a veritable bloodbath – so you and others of your ilk can swoop and pick the carcasses of dreams destroyed…

            After which we will almost certainly have generations of affordable housing and the prosperity it brings.

            Do you find condemning those same people, plus their children, grandchildren, great-grandchildren, and the generations who follow to a lifetime of debt slavery to be a better option ?

          • I don’t think there is an easy answer. My preference is for a slow melt tolerable over time leading to levels more consistent with historical norms; more cost efficient construction/size of housing; addressing some of the land regulation issues Leith and Phil Best advise.

            My younger siblings have mostly purchased in outer metro Melbourne, are starting families and do struggle but were totally over renting/moving so accept the tradeoff. They would have preferred to purchase closer to the city but cost did not permit – have mortgages in the $200k-$300k range.

            As for the debt-slavery meme gathering force here at MB, most generations have endured one type of ‘slavery’ or other. As Taleb says, unless you have fuck-you money or adopt artisanal life skills there is no escape from the conundrum of economic existence.

          • 3d1k 11.14am, I sense genuine bewilderment in your question. If so I welcome it. No, I don’t want to crash the economy merely to pick over the rubble. Other bearish activists may want this and your lumping all together does no one credit.

            Imagine instead of madly buying RE, the Australian people had invested the ~$1.5 trillion land overvaluation buying BHP, Rio, Xtrata, Glencore and Vale. We’d own them – the whole bloodly lot. And we’d also have cheap housing.

            But no, we decided to become a nation of petty rentiers, beggaring the generation that follows – driven by our lousy tax system that sucks blood from wages and deifies other earnings streams.

            A polity genuinely devoted to the welfare of its citizens would make inexpensive land a central objective. Our abundant space ought to be recognised as a key national advantage.

            Instead, millions have pursued a mirage, leaving us with towering private debt.

            So The Great Australian Land Bubble makes me angry at several levels.

            I cant help or advise those already committed to the RE fantasy. But I can help young adults by pointing out current market prices are unsustainable and joining the Ponzi scheme this late would be financial suicide.

            Don’t Buy Now!

          • As for the debt-slavery meme gathering force here at MB, most generations have endured one type of ‘slavery’ or other.
            What’s your point here ? That because something bad has happened in the past we shouldn’t worry about it happening in the present ?

            As Taleb says, unless you have fuck-you money or adopt artisanal life skills there is no escape from the conundrum of economic existence.
            Throwing half of your household income into shelter isn’t “the conundrum of economic existence”.

          • DavidC: Bewilderment in terms of those seeking a ‘bloodbath’ in property in order to secure said property for themselves. Gobsmacked really.

            Dr Smithy: Slavery takes many forms from modern mortgage slavery to the satanic mills of the industrial revolution to feudal existence to abject poverty/hand to mouth existence in developing countries to perpetual prison of the closed mind. Given it is individual choice to enter the property market perhaps not so bad in comparison…

            ‘Throwing half your household income into shelter’ remains a choice. Many in other places need dedicate three quarters of their household income (or more) in order to provide a rudimentary diet…and whilst both are far from ideal each is part of the conundrum of economic existence.

          • 3d1k..Who felt sorry for all the rural people whose lives have been destroyed while this RE ponzi was built over the last 50 years?
            Did anyone give a RA? The answer is no.
            The ‘slow melt’ scenario comes at the expense of the continuing destruction of other lives. The RE ponzi is not costless.

            Our economy and society is damaged, in my opinion, beyond repair. However we need to make some start. Reform will cost dislocation.
            “If not now – when?’

            ‘The answer lies back in time.’

          • Flawse -HNY!

            I am not quite as despondent as you, I don’t think the economy/society is broke beyond repair. I do think serious problems exist and suspect that some pain will be felt as we transition (if indeed we do) to the economy/society our children and their future children inherit. They might be the ones to do a better job.

        • Be careful what you wish for reusachtige, a total blood bath will have far reaching consequences (aka Japan). The collapse of a $1T market will cause all sorts of mayhem (personnel and business bankruptcies, systematic banking collapse) that quite frankly, not many of us will come out of unscathed. Even if you wanted to buy a house that’s lost 60% in value, you’d best be paying in cash cause no one will give you a loan unless you have a massive deposit. I’m not defending the real estate industry, it would please me nothing more than to see this insidious parasitic industry placed where it belongs but our Governments do not have the stones to rein them in and wind back their influence.

          • Mining BoganMEMBER

            It’s the human cost. I’ve seen it twice in the last couple of months.

            Dream home-living large-plenty of debt-can’t repay-pressure on relationship-value of home drops 25%-begin to hate the sight of home and what it stands for-relationship over-house sold and still in debt-depression-suicide.

            Twice. This is the real cost of this bullshit housing boom.

  2. Eight corporate subsidies in the fiscal cliff bill.

    I can’t believe how often these pigs get their snouts in the trough. Outrageous.