Houses and Holes

39

Chinese drug money mass laundered in Aussie property

Via Banking Day: Nathan Lynch of Thomson Reuters Regulatory Intelligence The revelations about Chinese asset recovery agents operating covertly in Australia will put pressure on the Department of Home Affairs to introduce law reforms ahead of the May general election. The government is sitting on “Phase 1.5” legislation that will prepare Australia for the introduction

30

Coles shocker adds to consumer worries

Via the AFR: Coles’ net profit fell 29.4 per cent to $381 million in the six months ending December after Australia’s second largest food and liquor retailer booked $146 million in supply chain restructuring charges. …Coles posted its 45th consecutive quarter of same-store food sales growth, but momentum slowed dramatically to 1.3 per cent in

3

Daily iron ore price update (Vale’s agony)

Iron ore prices for February 18, 2019: Spot and paper up. Steel down. Ferrous and steel markets are headed in opposite directions. This is unsustainable as Chinese steel mill profits collapse. Normally, bulks would getting caned right about now but the artificial prop is Vale, via AFR: Brazil’s government on Monday banned new upstream mining

52

Housing bust spreads into services activity

The warnings of slower services activity spreading from the housing bust continue to mount. We know that Westpac is stalled, BOQ is shrinking, McGrathmageddon and Domainmageddon roll on. But these are obvious, direct casualties. More interesting now are indirect multipliers. There’s SG Fleet for instance: Fleet management provider SG Fleet has posted a 7 per

2

Voters trust Bowen over Frydenberg on Hayne

Via AFR: Many more voters trust Labor than the Coalition to implement the recommendations of the banking royal commission, according to a poll that also shows Josh Frydenberg and his rival Chris Bowen level-pegging as the nation’s preferred treasurer. The latest The Australian Financial Review-Ipsos poll, the first for this political year, shows almost half

29

Domain switches on the property spruik machine

We’ve seen this before. The method is to find isolated property bulls and represent them as some kind of booming movement. Via the AFR, apparently looming rate cuts and no more Hayne has: …lifted a range of housing market indicators – open inspection attendances, auction attendances and auction clearance rates – above their levels of

22

Huang exile poisons Chinese papers

Via Domain: Two Australian Chinese-language papers have dedicated their front pages to an open letter backing billionaire Huang Xiangmo, whose permanent residency was cancelled for reasons including character grounds in early February. The letter, which appeared on the front pages of the Sing Tao Daily and Australian Chinese Daily and inside a third, the Daily

35

Chinese Communist Party bounty hunters roam Australia

Via Banking Day comes Nathan Lynch of Thomson Reuters Regulatory Intelligence: Chinese law enforcement agencies have resorted to the use of private sector “bounty hunters” to track down assets in Australia that are linked to Mainland corruption, as diplomatic tensions flare over money laundering and capital flight. Australia is growing increasingly concerned about the use of

72

The Greens are dying of ideological confusion

Via Domain: “I don’t know what the platform is,” says one despondent activist of the Greens’ campaign. “I don’t even know what the f—ing slogan is.” …Now a long-term parliamentary staffer, Jack Gough, is also resigning, telling the Herald that he believes those scientists who say the world has only a dozen or so years

23

Some free advice for Highrise Harry

Because he sounds like he needs it, via Bloomie: Harry Triguboff is remarkably calm about Australia’s worst real estate slump in a generation considering he’s got more at stake than perhaps anyone on the planet. …“If prices fall, I’ll buy the land cheaper,” Australia’s second-richest person said with a wave of his hand. “As long

7

Why Labor must ban LNG imports

Australians are paying more for their gas than the Japanese again. Asian spot prices are today at approximately $9Gj. On the east coast of Australia they are approximately $10Gj. Under the terms of the Australian Domestic Gas Security Mechanism (ADGSM) the local export net-back and spot price should now be $7Gj. Though we should also

3

Chinese credit explosion launches Australian dollar

DXY was weak Friday night. Unusually, so was EUR: The Australian dollar jumped against the USD but held elsewhere: CFTC data is still lagging badly but mid-January numbers still had the AUD moderately short at -37k contracts: Gold jumped: Oil took off: Base metals too: And big miners: EM stocks were surprisingly subdued: But junk

5

Bull or bear market rally?

Via Damien Boey at Credit Suisse: Overnight, we received very disappointing US retail sales data. Headline nominal sales fell by 1.2% over the month, their sharpest monthly decline since the financial crisis. Notwithstanding ongoing strong job creation, consumption weakened on the back of low confidence and market turbulence.   We estimate that year-ended growth in

22

Minsky’s nightmare: China’s 65m empty apartment problem

Via Nikkei: A massive building boom across China, including in tier-two cities like Jinan, has left as many as 65 million empty apartments across the country, according to estimates by Gan Li, a professor at Southwestern University of Finance and Economics in Chengdu. Sales volumes in 24 cities tracked by China Real Estate Index System fell

14

Labor’s banker smash fires up ASIC

Do not expect any loosening of credit in this cycle, via AFR: The corporate regulator’s chief prosecutor, Daniel Crennan, QC, has warned the government has empowered him to pursue “extremely harsh civil penalties and criminal sanctions against banks, their executives and others” after the Senate passed tough new rules for white-collar offences. Corporate executives could

21

Ken Henry leaves behind Australia’s least trusted bank

Via The Australian: Ken Henry is nothing if not staunch in his self-belief. His friends have often described him as the “great oak” – the stronger the wind blew, the harder he pushed back. For months since a disastrous appearance before the Hayne banking royal commission last year, Henry was convinced that he had done

1

Australian dollar remains bound to Euro’s fate

DXY softened a touch last night as EUR firmed: The Australian dollar was weak against DMs: But strong against EMs: Gold firmed: Oil too: Base metals are giving reflation the bird: Big miners were mixed: EM stocks flat: And junk: Treasuries bid big: The bund curve keeps flattening: Stocks were flat: The big data release

1

Chinese trade booms!

Via Capital Economics: Shipments beat expectations but seasonal distortions muddy the water • The January trade data were much stronger than anticipated but seasonal volatility caused by annual shifts in the timing of Chinese New Year make it difficult to get a good grip on underlying trends at this time of year. Even if the

14

ASIC prepares for HEM 2.0

Via AFR: The Australian Securities and Investments Commission (ASIC) has released updated guidance on how banks should verify customers living expenses before lending, to meet its expectations regarding the responsible lending laws. Lenders using the Household Expenditure Measurement (HEM) as a benchmark will need to apply a “reasonable buffer” reflecting the benchmark is too low.

27

Two can play the fear game: Mediscare 2.0 warms up

Via New Daily: Labor is preparing to unleash a Mediscare 2.0-style campaign, claiming the Morrison government cannot be trusted on GP fee increases and cuts to health. In her first major speech to the National Press Club, opposition health spokeswoman Catherine King said having failed to introduce the $7 GP co-payment, the Prime Minister was trying