Houses and Holes

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Links Oct 1: European loathing

Pick of the day: Why the European bailout is doomed. Satyajit DasBHP wants monthly ore contracts. BloombergWhy they will probably get them. Metal MinerTough Chinese rebalancing. Michael Pettis parotted by Karen MaleyOn US trade war rhetoric. Naked CapitalsismDow still stuck in bear market dynamics. Econompic Why the Aussie is on a moonshot. Falkenblog

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Links Sep 30: yuan pressure

China currency legislation passes US House. BloombergBeggar-thy-neighbour. Martin Wolf, Gavyn DaviesFalling $US can save US economy and Obama. Simon JohnsonTrouble for the US ISM? Truck tonnage collapses. Calculated RiskIMF beat-ups. David Uren, Tim ColebatchActual IMF reports. Australia and Liquidity risk.China will boom on. Michael StutchburySingapore clears 90% of iron ore swaps. BloombergCopper rips again. ReutersSlow

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Fitch prepares the rubber stamp (Updated)

The market is apparently abuzz with heavens knows what pertaining to the banks and the Fitch Ratings announcement that they are …probing the potential impact of a spike in mortgage defaults or drop in house prices on the portfolio of Australian residential mortgage-backed securities and banks it rates. Over the last few months, Fitch has

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Links Sep 29: you versus the corporation

Pick of the day. Forget left versus right. It’s you versus corporations. Barry Ritholz Whilst this is undoubtedly worse in America, before you guffaw, think big bank bailout, ETS, RSPT, policy convergence and oligopolies in every sector…Markets won’t like a smaller QE2. CalculatedRisk and Karen MaleyThough perhaps it’ll be BIGQE2 if this rank US data

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Goldman warns of an Australian recession

This blog has been meaning to post on the relatively recent Goldman Sachs report on Australian housing by economists Tim Toohey, David Colosimo and Andrew Boak. It is a very long report and there is little point in going through it blow-by-blow. But, contrary to the way it has been reported, the research is frighteningly

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Foreign bond deluge

This blogger tracks Australian bank’s foreign liabilities using the ABS’s National Accounts: Financial Accounts. It aggregates the bonds our banks sell to oversees investors. June quarter figures were just released and show that our banks now owe $323.9 billion on bonds with maturities above one year. And another $83.3 billion in bonds with maturities under

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Links Sep 28: Pascoe smackdown

Must read: Pettis does Pascoe. China Financial MarketsWhy the Plaza Accord was not responsible for Japan’s bubble. Models and AgentsWhen will the USS QE2 sail? Calculated RiskIreland and Portugal spreads won’t stop. FTAlphaville Greece looking a bit better. BloombergHope springs eternal. The Dow is going to 38,820 (LOL). BloombergChina trade war. Real Clear MarketsUS dollar

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Is Aussie Mac real?

Robert Gottliebsen today takes on government guarantees of Australian banks. It is more than welcome that this topic gets greater public scrutiny. It is nothing short of bizarre that the very foundation upon which Australian banks operate has shifted and yet we carry on as if nothing has changed. Nonetheless, there are a series of

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Currency meltdown

David Uren has a useful piece this morning suggesting the bull market in gold is presaging a global currency crisis. If money is a store of value, printing more of it represents a devaluation. These concerns were further fanned last week by the central banks of England and Japan. Minutes of the Bank of England’s

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Deciphering Treasury’s Red Book

Delusional Economics highlights an important Business Day scoop in which they have gotten their hands on parts of Treasury’s Red Book for the incoming government. It includes the following passages: “A key risk for the Australian economy is our reliance on short-term external debt, largely intermediated through the banking system … Among Australian financial institutions

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A plea for a G2

As China and the US shunt their way towards a trade war, I offer this excerpt from The Great Crash of 2008 as a roadmap for economic co-operation between the powers. I co-authored the book with Ross Garnaut but this section was written by the good professor. Sadly, I see little chance of this happening…

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Links Sep 24: Wen flips the bird

Wen: No way, Jose to 20% yuan lift. BloombergWhy the US should have gone Swedish (with the bailout). Barry RitholzUS leading indicators: all about cheap dough. EconompicMr copper still ripping. BloombergIs the US in 1931 or 1921? Baseline Scenario

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Bubbles Macfarlane

This post began as a critique of yesterday’s RBA release of its discussion paper: Asset Prices, Credit Growth, Monetary and Other Policies: An Australian Case Study. The study is in large part an examination of the Macfarlane RBA’s attempts to “lean against the wind” in 2002 and 2003 as an Australian asset bubble emerged. The

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Links Sep 23: Bernanke’s fires up the whirlybird

Gavin Davies notes that the US FED has overturned decades of hard yakka and has now committed itself to making inflation rise. He concludes “…it is not difficult to see why the dollar has been falling, and gold rising”. But Chris Whalen goes bananas on declining profitability in the US banking system and declares ahead

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Determined denial

Everyone has seen the ads. A sturdy and commonsense banker confronts a troupe of American advertising hot shots. The banker responds with steady incredulity to their fast and loose attempts to modernise his brand. He is the model of prudence, juxtaposed against faddish spin doctors. In the real world, Commonwealth Bank executives are travelling internationally

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Cliff or plateau?

This week saw the release of the RBA’s June credit aggregates, as well as the first concrete evidence that house prices are rolling over from RPData. Neither was terrifying but neither also was reassuring. As usual, the mainstream media offered up a plate of bullish slop, preferring to quote quarterly growth figures over the much