Houses and Holes

30

Good news from China

HSBC’s China flash PMI for October resumed growth jumping from 49.9 to 51.1. Just about every component made a turn for the better: This is something of a surprise, though perhaps it should not have been. The turnaround is being led by export orders, probably to the US where the August debt-ceiling shock has clearly

46

APRA spills the beans

Adding to recent RBA speeches, John Laker of APRA gave a speech late last week that parted the curtain on Invisopower! more directly than I have seen before. In his opening address to the Senate Standing Committe on Economics, Mr Laker said: Our assessment is that the Australian banking system is well placed to deal

10

Terms of trade still taking a hit

The Australian’s China correspondent, Michael Sainsbury reckons you should worry about Europe, not China: To read some of the headlines this week about Australia’s biggest export, iron ore, one might have thought the sky was falling. One might have concluded the iron ore worm had suddenly turned, that by far our biggest market, China, had suddenly got

95

Unoccupying Melbourne

I must admit, beyond writing a story about why we might want to carry the Occupy Wall Street banner downunder a few weeks ago, I haven’t shown a lot of interest in the various “Occupy” movements in Australian cities. Not for any particular reason beyond that I assumed, rightly it seems, that any Australian movement

85

Mining jobs in context

The Pascometer offers an advertorial today for “Queensland Mining and Gas Jobs Expo” which: …rolls into Caloundra on the Sunshine Coast today with organisers expecting 2000 people to attend.  On Wednesday 10,000 people turned up for the expo’s Gold Coast gig. The patchwork economy is working. Those with longer memories will recall job applicants queueing

27

Hope from the US?

Last night’s market action may have been worrisome for China (with metals crushed) and frustrating for Europe (going nowhere fast) but US data was excellent. The Philly Fed Index, a guide to manufacturing in the north east, and the same Philly Fed that collapsed in August, rebounded at a record pace, blowing away all market

20

Iron ore still falling

Yesterday brought no respite for iron ore. The 12 months swaps market fell another 3.08% to a new low at $117 and Shanghai rebar was down 2.44%. Ore itself fell 1.3% to $145.80. If you combine this with the dizzying crash of copper, 6% last night to a new correction low, you have to ask

64

Will you pay for The Oz?

In a stroke of irony, The Australian released the following story online this afternoon: THE Australian has announced it will launch digital subscriptions on Monday, with a three-month free trial for all readers. Publisher News Limited said the national broadsheet’s strategy was built around a digital content pass which would provide access to The Australian online and

15

NAB survey confirms Dutch disease

The September quarter NAB Business Survey  is out and as you can see above. It shows an economy with slumping confidence and conditions, but stable pricing. NAB also makes a point of describing an economy suffering from an unprecedented division between weakness and strength: Business conditions slump and confidence falters mid-quarter, but monthly profile points to subsequent

15

RBA dials up the bank support

The RBA is pouring it on in favour of the banks just now. That makes sense given the ructions in rippling through global banking. But it’s still interesting to examine the arguments. In a speech today, Malcolm Edey, Assistant Governor (Financial System) doesn’t bother with many, he simply repeats the refrain: In Australia meanwhile the

56

Our mining madness

I had an interesting chat with an old hand in the coal market yesterday. He described how the in the eighties, as Australian coal producers jockeyed to supply Japan, the annual pricing contracts that determined prices and volumes were a like a Presidential cycle. You’d spend a year negotiating, then agree terms, then resume negotiations

19

Boom and bust in iron ore

You know the ore market is in trouble when contracts start to disintegrate. There’s a raft of reports indicating just that this morning. The pick is from the AFR (and is free) but owing to its archaic attitude to the internet, copy and paste is disabled, so I can’t provide any of it. Here’s an

10

Will it be a black Christmas?

Dun & Bradstreet, the collections agency, has released a new consumer survey suggesting that the forthcoming Christmas will be a dour one. According to the survey: …which focuses on Australians’ expectations for savings, credit usage, spending and debt performance, also found that only 20 per cent planned to apply for new credit, down from a

30

Terms of trade shock brewing?

Last week I gave extensive coverage to a range of terms of trade shock stress tests conducted by the IMF on Australia. Sadly I must now discuss the same phenomenon as a realistic prospect. Over the last few days, there’s a bit coverage about how various iron ore barons and miners are “confident” of future

16

More on the car-house connection

I’ve dug into some more data to see what the car sales-housing connection might be able to tell us about future demand for credit and the results are striking. First is ex-refinancing monthly housing finance charted against car sales and, as you can see, there’s some kind of lead/lag correlation. The largest divergence over recent

13

Lending finance solid

ABS Lending Finance for August is out and shows growth across the board: AUGUST KEY FIGURES Jul 2011 Aug 2011 Jul 2011 to Aug 2011 $m $m % change TREND ESTIMATES Housing finance for owner occupation(a) 14 361 14 554 1.3 Personal finance 7 081 7 145 0.9 Commercial finance 32 298 32 948 2.0

2

Revisiting four dark clouds

In July this year I wrote a post called Four dark clouds. In it I described the challenges confronting the the globe’s four largest economies: Japan is far worse than markets or bullhawk economists predicted earlier this year. According to the NAB World In Two Pages report: In Japan, the tsunami and power shortages associated

11

Two speed states

I don’t use the rhetoric of the “two-speed economy” generally because it’s basically an Orwellian spin on something much older and well understood: Dutch disease. However, NAB’s monthly State by State report out this morning has a terrific breakdown of the the growth matrices in each state and makes fascinating reading. For instance, exports: And

8

Fitch installs its own Glass-Steagall

There have been times in the last couple of years when the GFC-chastened ratings agencies appeared to be racing one another back to some position of credibility faster than the world could bear. Well, that race is surely over now, with Fitch announcing after US trading the mother of all downgrade watches on, well, everybody.

5

China wrestles its slowdown

So, after some concerns and worries, the Chinese government has responded with new measures to try to solve the growing problem of tight financing for small and medium sized businesses. I would describe these measures rather as the” how to stop crazy bosses from running away because they have borrowed from loan sharks” policies. Following a meeting

9

More on unemployment

So, unemployment fell from 5.2862044% to 5.2477873%. Following are the charts. First, the larger picture. As you can see, for the past year job creation has been very patchy. If anything, it resembles the GFC period: Below is the split of part and full time jobs. There has been a lot of churning between the two

42

Unemployment down a tad

ABS Labour Force data is out and shows .1% fall in unemployment to 5.2% in September. No doubt this will excite the bullish pundits, who, having spent the better part of a month trashing the data, will suddenly fall in love with it again. The key points are below: SEPTEMBER KEY POINTS TREND ESTIMATES (MONTHLY

39

What’s freaked Swan out?

As I posted last night, the Treasurer, Wayne Swan, released a rather dour communique to Parliament indicating that Australia was ready to take on GFC 2.0. The timing of the missive seemed fairly random, though it did obviously seek to bring pressure to bear upon Europe prior to the G20, such as it is. I

22

A black Swan

In a Ministerial Statement released this evening, Treasurer Wayne Swan gave up on the endless China boom rhetoric and launched a new rather bearish narrative. The release appears to have three aims. First, it’s fair bet we’re seeing the ground shifted for the news that next year’s surplus is evaporating as we speak. Second, the

35

Refinancing boom

ABS Housing Finance Commitments is out for August and there’s a big move on. Here’s the state by state chart for total value of new loans: As we’ve noted many times, housing finance moves in lock step with price rises so surely prices are about to rocket in Sydney and Melbourne! Well…no. And here’s why:

4

Consumer confidence bounce stalls

So, the bounce in consumer confidence has stalled, increasing by just 0.4% in October from 96.9 in September to 97.2. There is a interesting picture building around consumption at the moment. On the back of flattening expectations for rate hikes, we’ve seen a little pop in retail sales, pent up demand if you will. I’ve also

66

Under attack

Dear Reader, MB comments are under attack from some unpleasant person or persons replicating user names and posting insulting comments willy nilly. No premium content details have been hacked. Of course we take this as a signal that we are doing an excellent job and upsetting some interest or another. For the time being, I’ve

7

The historic parallels for trade war

In his masterpiece, The World in Depression, Charles A. Kindleberger concludes the major cause of the Great Depression was a paralysis of leadership caused by the decline of the UK and the immaturity of the US. Neither was able to provide leadership and put themselves forward as the economy of last resort. Kindelberger argues that during