David Llewellyn-Smith


Roy Morgan consumer confidence eases

Fresh from Roy Morgan: The weekly Roy Morgan Consumer Confidence Rating fell to 122.8 (down 1.4pts in a week since October 12/13, 2013) down from the highest level since January 8/9, 2011. The fall was caused by a decrease in confidence about Australia’s economy over the next 5 years and in respondents financial situations compared


Sydney burns as carbon price goes

From the SMH: A senior United Nations climate change official says there is ”absolutely” a link between climate change and bushfires and has warned that the Coalition government will pay a high political and financial price for its decision scrap carbon pricing. In an interview with CNN’s Christine Amanpour on Monday, the head of the


Share markets grow a thicker skin

A cracking chart today from Deutsche looking at diminishing market responses to systemic risks: A few caveats. The is based on the VIX Index, which is an equities gauge based around investors perceptions of market volatility in the next 30 days. If we instead used the US Treasury yield, or CDS prices, the results would


BHP pumps dirt

The last of the big three ore miners it out with its Q3 production report and the BHP ore pumps are singing: BHP Billiton maintained strong momentum in the September 2013 quarter as production increased by 11% from the prior corresponding period. Optimisation of the Western Australia Iron Ore (WAIO) supply chain continues to unlock


RMBS market surges back

The Australian has a good story today on what’s driving Australia’s little credit rebound: HOME-LOAN lenders are on track to this year raise the most money from securities backed by mortgages since the global financial crisis, boosting competition as the property market picks up steam. …Last week, non-bank lender Pepper Australia upsized a non-conforming RMBS


IMF endorses macroprudential (again)

The IMF has produced new economic modelling endorsing the use of macroprudential policy to dampen credit cycles in currency constrained EU countries. The study undertook modelling for two Eurozone countries, and was aimed to examining whether maroprudential policy was an appropriate way to govern credit when neither interest rates nor the currency are not being


The boom is back!

House prices up (well, in Sydney anyway), stocks at cyclical highs, iron ore hanging in. Time for a dose of Charlie Aitken, now approaching lunar orbit: Goldilocks meet Santa Every night I read a fairy tale to my little daughter. I try to avoid the Brothers Grimm as their stories are pretty grim. Who leaves


Confidence fairy visits ACCI

The confidence fairy is back today. The Australian Chamber of Commerce and Industry has released ACCI Survey of Investor Confidence and fairy dust is sprinkled everywhere in expected sales and profits: That’s pretty impressive stuff! What is less impressive is actual conditions now and into the future. For sales and profitability we’re in the dunny: Far more


US youth needs class, not generational, war

Cross-post from Naked Capitalism is a riposte to Stanley Druckenmiller’s advice that the young declare war on baby-boomers. I pointedly avoid New York Times columnist Thomas Friedman; you can glean everything you need to know about him from the official Thomas Friedman Op/Ed Generator or some of Matt Taibbi’s lambastings (see here, here, and here for examples). So without attempting to wade


Will the iron ore price spike in Q4?

Followers of iron ore markets will recall that following last year’s September price collapse, a huge rebound in prices transpired through the Oct-Jan period. Last year’s cycle was more exaggerated than normal but the pattern is familiar. Most year’s Chinese steel mills destock iron ore in Q4 as the winter months slow construction activity and


Pettis: China is not floating rates

Exclusively from Michael Pettis’ newsletter This will certainly seem surprising to many, but as I see it the [currency] trading band is not an indication of a greater role for the market but rather almost the opposite – an attempt by the PBoC to limit the ability of the market to force it into changing


Capt Glenn on the Anglosphere

Pretty boring effort from Captain Glenn this afternoon delivered to the to the Australian British Chamber of Commerce. Nothing of import nor new but a potted history if you have time. It could have been the Dutch who started European settlement in Australia. In their journeys to the East Indies numerous Dutch traders saw the western


China GDP on the button

I’m not sure why I bother turning up for Chinese data. It’s always uncannily in line with consensus. Today is no different. Survey in yellow, actual in white: Here are the charts: Surprise free solid growth. Pretty good after two weeks of US drama.  


Bill Evans: US debacle means rate cuts

Bill Evans latest dovishness below. The Reserve Bank prudently maintained its easing bias in the October Board minutes. The most important aspect of the minutes was the decision by the Board to retain the following sentence: “Members agreed that the Bank should again neither close off the possibility of reducing rates further nor signal an


RBA blows smoke for banks

This morning Luci Ellis, Head of Financial Stability Department at the RBA, gave a speech titled Stability, Efficiency, Diversity: Implications for the Financial Sector and Policy. It’s an elegant ramble through the philosophies of risk but there are really only two lines of argument that matter in the entire presentation. I’ve bolded them below: More Stability Is


Who’s afraid of FMG?

Here’s a quick roundup of the broker takes on FMG after the Q3 production report. Morgan Stanley recommends “overweight” and says: Quick Comment – A shortfall of tonnes in 1Q should not impact the full year target, and does not change the over-arching investment thematic. We remain focused on the capacity to pay down debt


Industry still wants to trade carbon

The Australian Industry Group is on crusade this morning to render “Direct Action” moot. From the AFR: The Abbott government’s direct action climate change policy is unlikely to reduce carbon emissions sufficiently, and the money set aside for it would be better spent on paying for pollution reduction in developing counties, the Australian Industry Groups


Dagong downgrades US of A-

One ratings agency isn’t mucking around. China’s Dagong has stripped the US’s A rating and put it on A-, an upper medium grade that is shared by nations such as Brazil and Panama: 1. The partial U.S. federal government shutdown apparently highlights the deterioration of the government’s solvency, pushing the sovereign debts into a crisis


ATO targets property SMSFs

From the AFR: The rush by self-managed superannuation funds to borrow to invest in real estate has been described by the Tax Office as a “problem child” that will need urgent correction. ATO assistant commissioner for superannuation Matthew Bambrick said the tax office was working with the Australian Securities and Investments Commission to crack down on