Houses and Holes


Australian dollar thumped as economy falls apart

Some fantastically irrational market action today. The Australian dollar was thumped to within a whisker of the 0.66s as building approvals free fall: But bonds weren’t bid: Yet stocks assumed that they were, grabbing anything with yield: Dalian is firmer: Big Iron is partying. It’s not clear whether it is China going ex-growth, the trade


Is the Australian dollar carry trade back?

Via Damien Boey at Credit Suisse: As bonds have rallied furiously in recent weeks, an interesting development to note is that Australian real yields have remained flat, while US real yields have fallen sharply to negative from positive. As a result, the Australian-US real 10-year bond yield differential has closed to -0.1% from -0.4% in


Attention Australia, China is going ex-growth

Ratings agencies don’t get much right but this report is spot on and ahead of the curve, via S&P: – After four golden decades, China faces an inescapable slowdown due to demographics, deleveraging, rebalancing, and convergence. This is natural and mostly healthy. – Productivity will set the pace of China’s slowdown and will depend on


Steve Bannon on Huawei, Hong Kong and “Claws of the Red Dragon”

Steve Bannon on Huawei, Hong Kong, trade war, etc: Wrap below. Huawei is the greatest national security threat that America has ever faced—even greater than the threat of nuclear war—according to former White House chief strategist Stephen Bannon. The Chinese company Huawei, the world’s largest telecommunications equipment maker, has close ties to the Chinese Communist Party (CCP) and


Did Tianenman 2.0 just begin?

Via Epoch Times: Beijing appeared to be sending deliberate warnings to Hong Kong protesters with its irregular troop rotation in the region and a state media editorial openly endorsing the Hong Kong government to declare a state of emergency. At around 4 a.m. local time on Aug. 29, China’s state-run media Xinhua announced that troops


Corrupt NSW Labor cries crocodile tears for itself

Via The Australian: NSW ALP leader Jodi McKay has declared her party is in a ­“terrible state” and she “cannot fathom” how a ­donations scandal involving “bags of money being brought into Labor headquarters” had been allowed to fester for five years. Declaring a lack of confidence in her party’s campaign organisation, Ms McKay yesterday


Waleed Ali clutches his Brexit pearls

Waleed Ali is clutching at his Brexit pearls today: This trick of rebuilding globalisation through lots of new bilateral agreements is really designed to preserve the mythology of national sovereignty: to say Britain will remain in the global economy, but on its own terms. Sure, that’s a bit false, since free trade agreements typically require


Melbourne education super city crashes and burns

Farewell education super-economy, at The Age: The Andrews government was negotiating with the consortium behind plans for a $31 billion Werribee “super city” right up until the project was scrapped, the chairman claims in Supreme Court documents. Chinese-backed Australian Education City was picked as the preferred developer in 2015 to turn a huge parcel of


Zombie APRA shuffles after revving housing Ferrari

It’s horrible to watch as APRA’s head zombie regulator, Wayne Byers, shuffles along after a revving house price Ferrari. Check out this brain eating garbage yesterday from the man that should have been unceremoniously sacked after the Hayne Royal Commission exposed total APRA failure in the mortgage and wider banking market: The Australian Prudential Regulation


Daily iron ore price update (the crapening)

Texture from Reuters: Steel glut in China and seasonally weak domestic demand for the metal weighed on prices in recent weeks, including those of steelmaking raw materials. The slump in steel prices along with higher cost of raw materials — iron ore still trades above 2018 price levels despite its pullback from five-year highs —


Angry China slams Australia over diplomatic hostage

Via The Australian: China has told Australia to “stop hyping up” the case of arrested Chinese-Australian writer Yang Hengjun as concern grows in Australia over his detention and treatment in Beijing. “We urge the Australian side to respect China’s judicial sovereignty, stop hyping up the issue and pressuring China and stop interfering in any way


Ray Dalio warns again

Via Ray Dalio today: The most important forces that now exist are: 1) The End of the Long-Term Debt Cycle (When Central Banks Are No Longer Effective) + 2) The Large Wealth Gap and Political Polarity + 3) A Rising Work Power Challenging an Existing World Power = The Bond Blow-Off, Rising Gold Prices, and


Capex preview

Thanks to Westpac: The ABS CAPEX survey of private business investment plans will provide some further guidance on growth prospects. The June quarter update will be released on August 29, including the outcome for the 2018/19 financial year and the 3rd estimate of plans for 2019/20. We note that Estimates 1 and 2 for any


Time to ban all political donations

Bernard Keane at Crikey has a good idea: Short of towing the NSW Labor Party out to sea and sinking it, is there anything that can be done about persistent corruption in NSW? It’s clear from evidence emerging at the NSW Independent Commission Against Corruption inquiring into political donations that the party that gave us


Daily iron ore price update (stimulus fever!)

Texture from Reuters: The glut and tepid demand for steel in top producer China have dragged prices of the construction and manufacturing material lower, putting strain on the profitability of mills. “We heard some of them are already making losses,” said Richard Lu, senior analyst at metals consultancy CRU Group’s Beijing office. “They have decided


Risk rebounds, Australian dollar sinks

DXY was up last night as EUR sank. CNY found some support: The Australian dollar did not lift at all: EMs were also weak: Gold was strong: Oil too on a big US inventory draw: Metals were mixed: Big miners bounced: EM stocks didn’t: US junk is good, EM not so much: Treasuries were bid:


Doing business in China? Better check your “social credit score”

Via the FT comes the Chinese Communist Party hastening its own exit from the global economy: Foreign companies operating in China are unprepared for tougher sanctions under a corporate “social credit” system imposed by Beijing, a European business group has warned. Chinese regulators from tax officials to customs agents are increasingly rating companies according to