Houses and Holes


ASX plunges with iron ore

The Australian dollar is still holding around 77 cents: Bonds are bid, especially at the long end: XJO is down the better part of -2%: Dalian has crashed: And Big Iron is going with it. FMG is about to test its $4.50 support. When it breaks look out below: Big Gas is OK but is


US moves to prevent China “infiltration” of universities

The Dastayari Afifar goes global, via Campus Reform: Several Republican lawmakers are backing a new bill that would further tighten the screws on Chinese “Confucius Institutes” in U.S. colleges and universities. The bill, S.2583, was introduced by Republican Senators Marco Rubio and Tom Cotton, and is intended to amend two laws in order to make it


Hinch bends on corporate tax cuts

Via the AFR: Victorian Senator Derryn Hinch says he will accept an increase to the bank levy, rather than exempting the big banks from company tax cuts, as part of his suite of demands for supporting the remainder of the government’s 10-year corporate tax cut plan. But the government will reject any new impost on banks whatsoever. Openly admitting


Will the Banking Royal Commission deliver the jingle mail nightmare?

As we know, the banks have something of “liar loan” problem, previously via UBS: The most significant findings of the survey were (1) Only 72% of respondents stated their application was “completely factual and accurate”. 21% stated they were “mostly factual and accurate”, 5% stated they were “partially factual and accurate” while 2% “would rather


Is Chinese capital easing Sydney house price falls?

Here’s the chart: I’ve mulled whether the bank’s rorting APRA affordability measures is behind the stabilisation. But there is another possible factor. Late last year, China adjusted its capital controls for some corporates. Yuan outflows spiked immediately, chart from Damien Boey at CS: There is a pretty good correlation between Chinese capital outflow and Sydney/Melbourne


When Andrew met Pauline

Via the SMH: Andrew “Twiggy” Forrest has pledged to reinvest every dollar saved from the Turnbull government’s full company tax cuts back into job creation and expanding his operations, in a last-ditch effort to convince the Senate crossbench to pass the $65 billion measure. His company, Fortescue, paid $2 billion in tax last year and


Daily iron ore price update (wake in fright)

Iron ore price for March 22, 2018: Tianjin benchmark fell 20 cents to $67.70. Steel is breaking down. Coking coal too. CISA early March steel output collapsed 7.2% in an unusually steep post-restock fall. Reuters sums it up nicely: Steel demand typically improves from mid-March in China after a slowdown for the week-long Lunar New


John Garnaut in Washington: China is “manipulating” Australia

The very calm and China knowledgeable John Garnaut has delivered Washington an unsettling message, via The Australian: The powerful US House Armed Services Committee in Washington has been told by Malcolm Turnbull’s former adviser how China has sought to brazenly manipulate Australian society to ‘tilt the political and strategic landscape to its advantage’. John Garnaut,


CS: More mortgage rate hikes coming as funding costs spike

Via the excellent Damien Boey at Credit Suisse: Fed hikes again, with confusing guidance As widely anticipated, the Fed raised rates to 1.5-1.75% from 1.25-1.5%. That said, the tone of the accompanying meeting statement, and the Fed’s forecasts (dot plots) were a little confusing, but on balance appeared slightly dovish. On a median basis, officials:


Can the ACTU fix wage inequality?

Via The Guardian: Sally McManus has called for a return to industry-level bargaining to help unions win pay rises and organise workers in industries such as childcare. Appearing at the National Press Club on Wednesday, the Australian Council of Trade Unions secretary outlined the key demand of the Change the Rules campaign: “equal rights” for


Dodgy franchise sector gets inquiry

Via Domainfax: A wide-ranging parliamentary inquiry is set to probe the $170 billion franchising industry and examine claims of unfair business models and lax regulation in the scandal-ridden sector. …The terms of reference call on the inquiry to investigate the rules and regulations that govern the industry, including the effectiveness of the codes of conduct


Westpac leading index goes boom

Via Westpac: The six month annualised growth rate in the Westpac–Melbourne Institute Leading Index, which indicates the likely pace of economic activity relative to trend three to nine months into the future, rose from +0.68% in January to +1.30% in February. The level of the Index is well above trend indicating improving prospects for growth


Iron ore discounts to disappear as it crashes?

So says Liberum: The proposition that there’s a structural shift underway in the iron ore tastes of Chinese steel mills toward the less-polluting varieties is just a myth, according to Liberum Capital Ltd. “As margins fall, lower-grade material becomes more economic and the discount shrinks,” analysts Richard Knights and Ben Davis said in a note. “We


Mortgage arrears scream higher in January

From S&P: Home loan arrears rose in January. The Standard & Poor’s Performance Index (SPIN) for Australian prime  mortgages increased to 1.30% from 1.07% in December 2017, according to a  recent report by S&P Global Ratings. While improving employment conditions have helped to keep overall mortgage  defaults low, high household indebtedness is making borrowers more


Greg Jericho’s long credibility suicide note

More from Jericho Sell-out today: While retiree aged households have lower incomes, they have a great deal more wealth, because you accumulate wealth over your lifetime: A big reason for that wealth is property and superannuation. The richest 20% of households hold an average of $1.2m in property – 2.5 times the level held by


Peter Costello declares housing bust imminent

At the Urban Development Institute of Australia conference yesterday, the man most singularly responsible for Australia’s bubble economy, Peter Costello, warned that time is up as interest rates rise: If money is more expensive, asset prices must fall. Not all prices in every situation but overall they must fall. It’s going to be slow and it