Houses and Holes

26

How Snowy Hydro storage works

Via Westpac: As investor and energy industry interest runs high in Snowy Hydro’s big expansion plans, Chief Executive Paul Broad predicts greater reliability and lower electricity prices. As the balance of Australia’s energy generation moves inexorably towards renewable sources, battery storage is becoming critical. By its nature, renewable energy from wind and solar sources is

14

More dodgy dough for China’s latest patsy MP

Via Domainfax: Disgraced NSW MP Daryl Maguire accepted assisted travel to China from the same businessman who was allegedly pressured by Chinese intelligence agencies to cultivate Labor MPs Eric and Joel Fitzgibbon during an earlier all-expenses paid trip. Mr Maguire flew to China for 11 days in August 2002 with financial assistance from ACA Capital

29

Gottiboff: Chinese property buyers are back!

Via Gottiboff today: The credit squeeze being imposed by the Australian banks and the surprising changes in China are rewriting the rules in the Australian dwelling market — particularly in Sydney and Melbourne. Suddenly the Chinese are back as investors, albeit on a much smaller scale. Outer Sydney home building rates have been slashed and

4

Is the base metals crash the end of the cycle?

Via Moody’s: Base Metals Price Drop Suggests All Is Not Well Though it goes practically unmentioned, one of the more unexpected developments of late has been the stunning collapse of Moody’s industrial metals price index. In part, the industrial metals price index’s average of July-to-date is a deep 8.2% under its June 2018 average because

2

New home incentives climb as buyers dry up

Via the AFR: Villawood Properties boss Rory Costelloe says builder rebates – or “secret commissions” – have returned to the Melbourne land market. Mr Costelloe, the executive director and co-founder of Victoria’s biggest private land developer, said the rebates, which developers offer to builders to entice buyers to their estates were a sign of “stress

1

Trash the NEG

Via The Guardian: A national energy guarantee with a more ambitious emissions reduction target of 45% by 2030 would lead to power prices falling over the life of the scheme in contrast to the Turnbull government’s proposal, according to new modelling. With the Neg bound for a make-or-break meeting in August, the new number crunching

0

S&P reiterates negative ratings outlook for Aussie banks

Via S&P: Negative Rating Bias Skewing Toward Stable Despite Downside Risks The ratings outlook bias for the pool of Asia-Pacific financial institutions that S&P Global Ratings rates has skewed toward stable during the second quarter ended June 30, 2018. However, downside risks remain, particularly regarding the possible emergence of a lower-probability negative scenario with a

0

Daily iron ore price update (history repeats)

Iron ore prices for July 19, 2018: Spot up. Paper down. Steel firm. We’re still in the equilibrium. History is repeating for miners. We already have BHP, RIO, FMG and Vale all investing heavily in high grade output. Now India joins them, from Creamer’s: Information and data sourced from industry indicate that overseas shipment and

3

How far can China’s latest property bubble up carry it?

Some nice charts via Vertical Group (which is an MB client in case you’re wondering): While many have attributed the resilience in China’s steel prices this year to Xi Jinping’s “supply-side reform magic”, we believe a much more basic measure is at play. More specifically, we believe that as external pressures began growing last year, intensifying

16

Bloomberg: Sydney & Melbourne house prices to fall for years

Via Bloomie: That’s the consensus from a Bloomberg survey of 15 economists, over a third of which have turned more pessimistic within the last three months. Sydney’s slump is poised to deepen, with the median peak-to-trough price fall estimated at 10 percent compared to 5 percent for the country as a whole. Still, the data

11

Major bank mortgage arrears climb to highest since 1990s

It’s not seasonal, either, via S&P: Arrears on Australian prime home loans increased in May. The Standard & Poor’s Performance Index (SPIN) for Australian prime mortgages rose to 1.38% in May from 1.36% in April, according to a recent report by S&P Global Ratings. The SPIN for nonconforming mortgages fell to a record low for

19

Australian dollar jumps as jobs boom again!

The ABS has released June job numbers and the news is boom again! Employment increased 50,900 to 12,573,600. Full-time employment increased 41,200 to 8,565,200 and part-time employment increased 9,700 to 4,008,400. Unemployment decreased 1,100 to 714,100. The number of unemployed persons looking for full-time work increased 5,100 to 501,900 and the number of unemployed persons

7

Land banker: Melbourne overrun by specufestors

Via the AFR: Financial Review Rich Lister Nigel Satterley, the country’s biggest private residential land developer, is changing his development strategy amid growing concerns about the stability of the housing market and the emergence of speculators in Melbourne. …Amid the boom in land prices and shrinking affordability, Mr Satterley said he was also concerned at

2

Labor heads straight down path of lower wages for longer

I don’t object to this stuff at all, at the AFR: The Australian Council of Trade Unions congress passed a resolution on Wednesday that called on Labor to “implement a policy of installing employees on company and government managed boards”, including at the Reserve Bank. A 220-page industrial relations policy passed at the end of

41

Bishop, Wong contract “Trump derangement syndrome”

Competing back-tracking today from Australia’s foreign minister and her shadow. Julie Bishop gave Washington a slap: In a significant speech at London’s Chatham House, Bishop said the international rules-based order put together after the chaos of World War II “is facing its greatest test as it is challenged and strained on multiple fronts”. This crisis

0

India squashes LNG shortage drivel

It’s all garbage: India’s renegotiated gas import deal with Russia’s Gazprom will save between Rs 8,500 crore and Rs 9,500 crore over the contract period ending 2040, Oil Minister Dharmendra Pradhan said today. State-owned gas utility GAIL India Ltd had in January taken advantage of the Russian company’s inability to deliver liquefied natural gas (LNG) from the

5

Is the Chinese yuan a weapon or weakness in the trade war?

Kevin Rudd says weapon: Mr Rudd laid out the “danger scenario” at an Asia Society event on Wednesday and said it could follow the Trump administration’s decision to impose wide-ranging tariffs on Chinese goods. The yuan is Asia’s worst-performing currency since mid-June, down more than 4 per cent. “If China sees this as a way

15

MB Fund tops Australia’s best super funds

Via The Australian: Industry super fund Hostplus is taking a contrarian view on the market as it celebrates being named Australia’s best-performing super fund for the second year running. The fund’s balanced option posted a 12.5 per cent return for the 2018 financial year, smashing the median return of 9.2 per cent across the industry,

2

More banks abandon SMSF mortgages

Pants pooing has become a common pastime for specufestors: Over the past week, four separate lenders have announced their exit from the SMSF lending space, with a further two banks saying loans will no longer be offered to SMSFs. Westpac announced that effective 31 July 2018 it would no longer offer property loans to SMSFs for both

0

Why emerging markets suck the big one

Via Bloomberg: Emerging markets are poised to rally after more than $7 trillion in stocks slid into bear territory, according to three of the world’s largest money managers. Strategists and investors from Goldman Sachs Group Inc., Franklin Templeton Investments and BlackRock Inc. say cheap prices, rising corporate profits and strong fundamentals will outweigh risks from

1

Another view on a slowing China

Via Barclays: Credit crunch, escalating tariffs, more easing Moderating April-May data suggest the rise of a “credit crunch” due to various government bodies’ sustained policy tightening, which has started to have a visible effect on the economy. With our theme of moderating growth, tightening regulations and escalating trade tension continuing to play out into H2,