Houses and Holes

40

RBA Minutes see more cuts ahead

It’s looking pretty unlikely that I’ll have to run up a local mountain naked. The RBA Minutes today were uber-dovish. I’ve highlighted the three key passages at the end. There are three key considerations: where is mining bust at; where is the housing recovery at and where is inflation at? Two of three have gone

44

Tinkler’s firm bites the dust

From the AFR: Nathan Tinkler’s private company, Mulsanne Resources, has been placed in liquidation after it failed to settle a $28.4 million equity placement bill with Queensland coal developer Blackwood Corp. The more things change…

10

Moody’s junks France’s AAA rating

Breaking from Moody’s: Frankfurt am Main, November 19, 2012 — Moody’s Investors Service has today downgraded France’s government bond rating by one notch to Aa1 from Aaa. The outlook remains negative. Today’s rating action follows Moody’s decision on 23 July 2012 to change to negative the outlooks on the Aaa ratings of Germany, Luxembourg and

13

Are we on the verge of an LNG bust?

From The Australian: ROYAL Dutch Shell is reviewing the ownership structure of the planned $20 billion Arrow coal-seam gas export project in Queensland as cost blowouts continue to plague the sector. The oil and gas giant has begun talks with third parties to help it develop the project but says it may delay approval as

22

We love the big banks (except ANZ)

From Banking Day: Despite widespread complaints about “big banks” in general, Australian consumers have never been happier about their own Big Four members, says the latest Roy Morgan data. That’s as long as the Big Four member is not ANZ. NAB, CBA and Westpac all recorded record customer satisfaction scores for October 2012, according to

52

Labour prices are yesterday’s war

We all know that the mining sector and the AFR have been fighting a wholesale battle to pressure governments and unions into doing something about labour costs. There is no doubt whatsoever that labour costs ran away in the boom, especially for miners. But one can’t help wondering why it is suddenly such an issue

4

The IEA’s happy US oil forecasts

Cross-posted from FTAlphaville. When the International Energy Agency’s big annual report came out last week there was a big top line story picked up nearly everywhere: that US oil production will overtake Saudi Arabia by about 2020. This is due to projected rises in oil being wrung from the sort of shale formations that have been the

4

CBA makes hay with the mining bust

Late yesterday, CBA produced a note with the combined resources of its economics, commodities, currency and equities teams that argued that: With commodity prices off recent highs a question is being asked is, “Is the resource boom over?”  We put that question to CBA’s Economics, Currency,Commodity and Equities research teams. They conclude that the resource boom is a

33

Unproductive productivity hand-wringing

From the AFR: Productivity experts have said it is too late to avoid the country experiencing a sharp drop in growth and living standards when the mining boom ends in the next few years, backing predictions of a “growth cliff” made by National Australia Bank chairman Michael Chaney. Clearly the AFR did a bit of

0

Traders push thermal coal rally

Courtesy of ANZ. Newc FOB physical thermal coal and Australia FOB coking coal prices firmed last week, with Asia demand showing signs of improvement for early next year loadings. Reports suggest traders were covering their short positions before closing their books or the year and ahead of Xstrata’s annual negotiations with Japanese utilities for thermal coal contracts starting in January. Reports

22

APRA taking heat from IMF

From Banking Day comes an excellent analysis of last week’s IMF report vis-a-vis the banks. I may have downplayed this overly last week, given I’ve been waving my arms about it solo for three years, the subject seems tired to me. Anyway, on with the show: The IMF’s latest Financial System Stability Assessment of Australia was released

6

Another dud Xmas for retailers?

Westpac’s magical Red Book included a special on Christmas spending this month and despite the turn in consumer confidence, it showed a subdued result. The Nov survey included our annual questions on Christmas spending plans. The results suggest that despite the improved tone to sentiment consumers are approaching this year’s festive season with much the

0

Macro Investor Volume 1, Number 21

When being a top-down or macro investor it is easy to become all-consumed by data, news, commentary and theory across  politics, economics, history, finance, philosophy and more. In a busy week, like the one that’s just past, countless hours can  pass reading the papers or sitting up late on the internet trying to make sense

15

LNG presses the panic button

It’s funny watching the growing brouhaha at the AFR over Australia’s growth prospects. Not really funny as such or satisfying either, but having predicted it, a certain amount of schadenfreude is unavoidable. Anyway, with that trumpet-blowing behind me, today’s example is Michael Cheney, Chairman of Woodside: Australia is likely to fall off a “growth cliff” when the resources investment

0

Macro Investor this week

If markets were risk-averse ahead of last Tuesday’s US presidential election they went haywire afterwards. With a massive fall on the S&P500 Wednesday (helped in no small part however by a risk-off move in Apple shares), Barack Obama was greeted on Wall Street with opprobrium, not joy. Nonetheless, while the reaction may have been a

41

Weekend links

Global Macro: Israel mobilises. WSJ North America: What should the President do? Paul Volcker The nervous wait for Congress. FT Sandy hits industrial production. Calculated Risk Or did it? Zero Hedge On eve of fiscal talks, positions harden. Reuters Talks constructive. Bloomberg It’s the earnings, stupid. Prag Cap Europe: 1930s medicine sends EZ into recession. Telegraph

13

IMF endorses everything (with risks)

The IMF’s new report on Australia is out and pretty much endorses everything official with the now regular warning about the offshore funding vulnerability in the banking system. The section on current account deficits is interesting, too, with a medium term forecast of 6% and worse if government misses its surpluses (which means it will

13

AiG on labour market flexibility

Find below a good speech by Innes Wilcox of the Australian Industry Group on where we find ourselves in terms of labour market flexibility. There are lot’s of good points in this speech to consider. There is little doubt that Australia’s real exchange rate, including labour costs, has inflated to a dangerous point. Having said

38

Forrest declares mining tax “evil”

Andrew Forrest isn’t sparing the horses, or the hyperbowl, in going after the MRRT. On ABC radio this morning he announced in the great tradition of Edmund Burke (who didn’t actually utter these words) that: …his High Court challenge against the federal government’s mining tax is about conquering evil. All it took for evil to

106

Xie vs Swan on Australia as Spain

The Australia/Spain analogy seems to have caught the imagination of global media. Another debate has emerged between Wayne Swan and Andy Xie on CNBC: Australia’s Deputy Prime Minister and Treasurer Wayne Swan has denied that Australia’s economy is at risk of a Spain-like economic crisis, calling the thesis put forth by the former chief Asia-Pacific

3

Daily iron ore price update

Iron ore continued to edge higher yesterday, perhaps helped by the resolution of Chinese leadership: Not much more to say today but came across the following classic from Creamer’s Mining Weekly: While iron-ore prices appeared set to make a partial recovery, they would remain volatile, as revised Chinese growth targets and performance were likely to result

33

S&P warning greeted with arrogance

It is amazing what is transpiring in our political economy at the moment. Here we are, with a once in a one hundred and fifty year mining boom ending, and we couldn’t be more happy about it. Earlier this week we saw a nice bounce in consumer confidence: And yesterday Westpac’s inflation and unemployment expectations data