Houses and Holes


Rio iron ore production misses

Rio’s first quarter production report was out earlier today and was a fizzer: Rio Tinto chief executive Sam Walsh said “Rio Tinto has started the year with a series of performance records as we continue to drive productivity gains across our operations. Our Pilbara iron ore business has again set new benchmarks for production, shipments


Chinese March new credit weak

The world’s most important credit data for March is out in China and it is weak. Total social financing came in at 2.07 trillion yuan, well ahead of consensus at 1.85 trillion but still down 19% year on year. Bank loans were an even half at 1.05 trillion: The shadow banking share isn’t shrinking: The


Padbury plays possum on Oakajee backer

From the AFR: The mining junior that claimed to have sourced $6 billion worth of funding from a mystery backer has broken its promise to reveal full details of the money this morning. Padbury Mining raised eyebrows on Friday when it told the ASX it had sourced $6 billion to revive the failed Oakajee port and rail project in Western Australia. …Padbury said


McCrann monsters Joye

Terry McCrann has booked a shocker today: OH dear. One of the Fin’s portfolio of — let’s be generous — idiosyncratic columnists, Christopher Joye, is at it again, pushing his loony line that all our banks, and indeed every bank in the world, is functionally insolvent. Now to most normal people, the very notion is


China wants to import its own labour

From the AFR: The federal government is facing demands from China that it be allowed to import workers for projects funded by Chinese investors as part of the free-trade agreement. The government is resisting, saying there would be a severe domestic political backlash should it ever agree. Eager to land the FTA with China, it is


Are stocks at the bottom?

The US economy is finally thawing out. Retail sales for March were out last night rebounded strongly. February was rounded up too (all charts from Calculated Risk): The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for March, adjusted for seasonal variation and holiday and trading-day differences, but


Kiev placates as separatism spreads

From the FT: Western governments struggled to present a united front to Moscow over the crisis in eastern Ukraine as pro-Russia separatists seized further government buildings in cities and towns in the region and defied a deadline from Kiev to surrender. Oleksandr Turchynov, Ukraine’s acting president, appealed to Ban Ki-moon, UN secretary-general, to deploy peacekeepers


A Chinese property crash has begun

That’s what Forbes argues today: Nothing is going right for Hangzhou at this moment.  Walmart will be closing its Zhaohui store in that city on April 23 as a part of its overall plan to dump marginal locations—about 9% of the total—in China. Thanks to the world’s largest retailer, another large block of space in Hangzhou, the capital


Daily iron ore price update (rebar rocket)

Here are the iron ore charts for April 14, 2014: Iron ore paper market softness continues. Physical is more firm, supported by the rebound in steel prices. Rebar futures fell a little and that market is moving into backwardation. The Baltic Dry capesize component fell 1.5% yesterday. Reuters has texture: “I think seasonal demand will


ANZ to launch its own newspaper

Australia is truly turning inside out. From The Australian: Tomorrow ANZ Bank will launch a new online media publication, Blue Notes, to be edited by Walkley Award-winning journalist Andrew Cornell. According to ANZ’s group head of strategic content and digital media Amanda Gome — a respected senior journalist and publisher formerly of Fairfax and Eric


Very cheap climate insurance

From the FT: The UN Intergovernmental Panel on Climate Change’s third report of a trio on global warming, released on Sunday, focuses on “mitigation” – how to fight rising temperatures by limiting the build-up of carbon dioxide and other greenhouse gases in the atmosphere. …The key objective is to keep the average worldwide temperature rise


Credit card revulsion rolls on

From COMMSEC: Figures released from the Reserve Bank show that the average credit card balance rebounded from a 4-year low in February, lifting by $58.70 (1.9 per cent) to $3,205.60. The average credit card balance was still 2.3 per cent below a year ago. In smoothed terms (12 month average) the average balance was down


The LNG cost curve

Courtesy of JPMorgan: The LNG cost curve has been rising for the past 10 years as result of more expensive materials (e.g. steel), energy costs, labor and upstream reserves (drilling and development costs). According to our database the most expensive LNG projects, measured on an integrated basis (i.e. including the capital costs of upstream and


The great coal whinge

Anyone reading the weekend papers cannot have missed the great coal whinge that was led by The Australian: THE world’s biggest miners have united in sounding the alarm that Australia’s $60 billion coal sector is under extreme pressure, with global giant Rio Tinto warning the industry is “staring down the barrel”. Harry Kenyon-Slaney, chief executive


Goldman: Why this NASDAQ bust is different

From Goldman Sachs: Our client discussions this week focused on two topics: Momentum reversal and comparisons between today and March 2000. Two questions dominated: “When will the reversal end?” and “Will the sell-off in momentum stocks drive a market-wide price decline as occurred in 2000?” During the past month, momentum has plunged by 7%, a 10th


Conflicted Murray Inquiry bashed

There are three articles around this morning aimed at the big banks and the Murray Inquiry. Opening us up is Chris Joye who slams everyone, quite rightly, but especially Ian MacFarlane: Consider, for example, how rapidly our “game-keepers” become “poachers”: the last two Reserve Bank of Australia governors, Ian Macfarlane and Bernie Fraser, and the


Australian dollar speculators get long

From NAB this morning via the SMH blog comes a chart of last week’s Commitment of Traders report on the Aussie showing that speculators have shifted to net long, from -4.900 to 3300: As I’ve said before, it’s the large and small speculators that control the market. With shorts largely washed out it’ll be hard


The unfolding housing “disaster”

Two commentators between them today sum up the state of housing, Australian rebalancing and monetary policy. The first is David Bassanese at the AFR: The Reserve Bank has prematurely shifted the emphasis of its jawboning strategy from the exchange rate to house prices, with potentially disastrous consequences for the economy in the months ahead. With household