Houses and Holes


Bugger the surplus. Households hate life without RBA insurance

MB often works with international hedge funds on the Aussie economy. I recall the reaction of one from the US when he discovered that, unlike US fixed rate mortgages, Australian mortgages are all floating rate. He declared immediately: “Households must all pray for the next recession!” Why? Because that meant cheaper repayments for the overwhelming


Gas cartel lays waste to aluminium industry

Here we go, via AFR: Australian smelters are struggling under high power costs and weak aluminium prices, and their reliance on fossil fuels is also becoming a competitive disadvantage, with Alcoa signalling that reducing its carbon footprint was an important goal of the “review” under way into almost half its global smelting fleet. …Federal Education


Why iron ore is going back to $20

Via Argus: Higher pollutant emission standards for China’s steel industry continued to drive the country’s steel scrap usage for steel production higher in the first six months of this year. Chinese steel scrap consumption rose significantly, by 20.7pc on the year to 103.28mn t in January-June from 85.57mn t in the same period in 2018,


“Double agent” Gladys Liu linked to OBOR push

Via Herald Sun: A close friend of Liberal MP Gladys Liu last year set up a group to campaign for China’s controversial Belt and Road Initiative within Australia and the Pacific. Prominent property developer Chen Guo Jing has been described on Chinese language sites as the “implementer” of the Australasia Belt and Road Advocacy initiative.


Foghorn: No RBA cut coming in November

Via RBA foghorn, Terry Mccrann: It will leave its official interest rate unchanged at its regular and decidedly idiosyncratic Cup Day meeting. Leaving the rate unchanged was already the most likely outcome of the meeting before Thursday’s monthly jobs data; the continuing good news on jobs made it a slam dunk. …The next rate cut,


Dumbified AFR dumbly attacks great Aussie dumbening

Let us recall where it all started. The Harvard Kennedy School’s Center for International Development has developed an Atlas of Economic Complexity, with Australia being ranked as having one of the least complex economies. The Atlas measures the diversity and sophistication of national exports, with almost all of Australia’s exports not requiring a degree to


Costello proves you can say anything and get away with it

From perhaps Australia’s greatest ever economic hypocrite, via Domain today: Former treasurer Peter Costello has blamed ultra-low interest rates for fuelling global political extremism and accused the Reserve Bank of focusing on global currency movements rather than the Australian economy when setting monetary policy. Speaking at the Citi Australia and New Zealand Investment Conference 2019


What killed coking coal?

Via Wood Mackenzie: There has been an uneasy tension around hard coking coal (HCC) prices for some time. Few would argue that US$200/t prices for seaborne HCCs were sustainable. But at the same time, the market had become accustomed to sky-high prices, kept artificially strong while China focused on restructuring its steel and coal sectors.


Trade war empties China’s office towers

Via SCMP: A building frenzy in southern China’s answer to Silicon Valley has driven the vacancy in Grade A offices to a record high, putting the squeeze on part-time developers whose blind inexperience have led them into the industry. A record 1.79 million square metres (19.27 million sq ft) of vacancy, equivalent to 10 of


Australian unemployment eases

The ABS is out with September Labour Force and the news is decent: SEPTEMBER KEY POINTS TREND ESTIMATES Employment increased by 20,200 to 12,942,800 people. Full-time employment increased by 9,000 to 8,840,200 people and part-time employment increased by 11,300 to 4,102,600 people. Unemployment increased by 1,600 to 718,000 people. Unemployment rate remained steady at 5.3%.


UBS: BOQ cuts divvy again

Welcome to the future of Aussie banks, via UBS on UQ: ONE LINER NPAT miss on higher Bad Debts. Dividend cut for the second consecutive half. KEY NUMBERS (FY19) FY19: (1) Cash NPAT down 14% to $320m (Cons. $330m); (2) Cash basic EPS down 16% to 80cps (Cons. 81cps); (3) Final 2H dividend 31cps (Cons.


Paedocoin exposed

Via Washington Post: U.S. and international law enforcement authorities have shut down one of the world’s largest child pornography websites following a raid and the arrest of Jong Woo Son, the underground site’s alleged South Korean-based administrator, federal officials said Wednesday. Federal prosecutors with the U.S. attorney’s office in Washington, D.C., and IRS and Homeland


BofAML: Bearish fundies point market higher

Via BofAML: Tweeting the October Global FMS #bottomline: Oct FMS shows investor sentiment bearish despite credit & equity rally; if trade war and BREXIT fears unrealized in Q4 then macro can beat expectations validating our contrarian bullish view. #up-in-cash: FMS cash levels up to 5.0% from 4.7%, leaving BofAML Bull & Bear Indicator at an


SEEK: Bedpan jobs boom rolls on

Via SEEK: “We are seeing a slight improvement in the market with the rate of job ad decline moderating, with September at -7.4% compared to August, which was -8.6%. Month to month we continue to see growth come from the large employing sectors of Community Services and Development which has seen a jump from 13%


RBA outlines “sizeable” construction crash

Yeh, they’re onto it at last. Deputy Governor Guy Debelle today: The housing market has a pervasive impact on the Australian economy. It is the popular topic of any number of conversations around barbeques and dinner tables. It generates reams of newspaper stories and reality TV shows. You could be forgiven for thinking that the


Bullied student seeks restraining order against Angry China diplomat

Via Domain and drawn from the OMG files: A University of Queensland student has sought a court order similar to a restraining order against the Chinese Consul-General in Brisbane, Dr Xu Jie, who he claims has endangered him by describing him as an anti-Chinese separatist in a statement published on the Consul-General’s website. Drew Pavlou,


He ain’t called Recessionberg for nuthin’

L-plate Treasurer Josh Recessionberg continues down his self-destructive path today. Via the AFR: In an interview with The Australian Financial Review before flying to an International Monetary Fund meeting in Washington DC, Treasurer Josh Frydenberg said restoring the budget to surplus was not a vanity exercise but integral to the government’s plan to buttress the


Daily iron ore price update (the thumpening)

Texture from Reuters: Benchmark Dalian iron ore futures slumped in morning trade on Wednesday, extending losses into a third session, after China’s top steelmaking city of Tangshan issued a second-level smog alert that requires mills to further limit operations. …The losses widened further after China outlined its annual anti-pollution plan for winter in a document