Houses and Holes


Is Japan about to trash the coking coal price?

Via Macquarie: Can the coking coal benchmark system now survive?  With spot seaborne prices remaining volatile in 2017, the benchmark quarterly pricing system on which most miners price has come under extreme pressure. There has still been no formal quarterly settlement for 2Q17 contract prices despite more than half of the quarter having passed,


Fortescue’s problem is getting bigger

As I reported earlier today, benchmark iron ore settled at $58.80 per tonne. 58% iron ore is today at $38.99. That means the discount is approaching 34% and FMG’s breakeven price is pushing north of $45, according to UBS: Moreover, SGX futures have worsened as well, steepening the 58% discount arbitrage: Rendering FMG insolvent within


Will cutting immigration smash the stock market?

The AFR says so: Poorly constructed and strict immigration policy is one of the biggest threats to sharemarket returns, say some of the country’s biggest money managers. An expert panel at the Stockbrokers and Financial Advisers Conference in Sydney on Thursday agreed Australian investors could face deteriorating returns thanks to short-sighted policy that curbed population growth. “One of


QLD fights a losing battle with Adani

Via The Australian: Indian energy giant Adani will be offered a reworked royalties deal at a discounted rate during the early years of coal production at its $16.5 billion Carmichael coalmine, after a meeting of senior Queensland cabinet ministers last night. A compromise was struck ­between Queensland Premier Annastacia Palaszczuk and her deputy, Jackie Trad,


Markets dismiss hawkish Fed

Got the lurgy today so limited posting. Fed minutes were out last night: …Importantly, PCE  growth was expected to pick up to a stronger pace in the spring, which would be more consistent with ongoing gains in employment, real disposable personal income, and households’ net worth. …Members generally judged that it would be prudent to


Australian dollar hit as Moody’s downgrades China

Moody’s turns interesting: Moodys downgrades China to A1 from AA3 Changes outlook to stable (from negative) Says rating reflects expectations that China’s financial strength will erode somewhat over the coming years Says stable outlook reflects assessment that at the A1 rating level risks are balanced GDP will remain very large ; growth will remain high


What do realistic assumptions do to Morrison’s Budget?

Recall Scott Morrison’s Budget fantasy: From Stephen Anthony today: On budget night, Scott Morrison pivoted from deficit-busting achieved through spending cuts, to a higher tax strategy — raising the Medicare levy and imposing the new bank levy — and by projecting rosy growth rates. He has assumed surging growth in tax receipts (from households and


Bitcoin: Ponzi gone global

I haven’t written on bitcoin for a while despite it going nuts: The reason is very straight forward. This is a global ponzi scheme and that’s the end of it. As a super-national currency, the only appropriate comparison with bitcoin is gold or other hard assets that hold their value when sovereign paper money does


Brisbane landlords put to the sword

Via The Australian: Prominent agency owner Andrew Coronis, managing director of Coronis, which operates 23 offices across southeast Queensland, said tenants were moving more readily to get better deals, forcing existing unit stock and “investor-style” apartment owners to cut prices. “We’re seeing a 17 per cent drop in rents and it is happening right now,”


Time to tell Adani where to go

Well done to Matthew Stevens: I mean, here we have a coal project proponent that has spent seven years driving through jungles of red and green tape, and more recently through a brutal wilderness of anti-coal resistance, only to belatedly find itself in desperate need for about $1.2 billion of government assistance if the project


Chinese yield rocket fires boosters as tightening rolls on

Via Netral: China’s $1.7 trillion government-bond market is turning ever weirder. In a fresh sign of the nerves among investors caused by Beijing’s campaign this spring to make Chinese markets less risky, the yield on seven-year government bonds rose to 3.79% on Monday, above the yield on both five-year and 10-year bonds. The highly unusual


Sometimes ad hominem is the only response

This idiot just never gets it: The man who vowed to financially support Adani’s Carmichael coal project while Premier of Queensland, Campbell Newman, says the Palaszczuk government’s inability to make a decision over the project was a “towering disgrace”. Mr Newman, who was Queensland premier between March 2012 and February 2015, and said the Labor