Houses and Holes


Macfarlane versus Stevens

Don’t say I didn’t warn you. When I wrote They are coming for the RBA in September last year, the current roar for hand over fist rate cuts was exactly what I had in mind: To me, it’s as clear as day that Australians hate their new economy. And, at face value, what’s to like? Although the


A four punch knock down for US data?

Last week, in The US recovery is thinning, before the release of Friday’s Q1 GDP I wrote the following: We’re still waiting for the Dallas Fed (which slowed signs of slowing last month) but there are widely consistent themes here: slowing headline numbers, slowing new orders, rising employment numbers, rising input costs and inventories. In


Moody’s puts QBE on negative watch

This afternoon, Moody’s placed QBE on negative watch.  QLMI was one of several reasons and not the most prominent. The stock sailed through the announcement unscathed.  It is worth noting, however, that if the parent is downgraded, it’s hard to see QLMI not suffering the same fate, and perhaps precipitating capital tops ups all around. Rationale below: Moody’s affirms debt ratings


Japanese PMI slogs on

The second of the North Asian PMIs that I follow is out today in Japan and the result is a continuation of the recent modest expansion: After adjusting for seasonal factors, the headline Markit/JMMA Purchasing Managers’ Index™ (PMI™) posted above the 50.0 mark that separates growth from contraction for the fifth successive month in April. By dipping from 51.1


A decade of develeraging ahead for the US

Hard on the heels of my cogitations about the “new normal” for the US this morning, Westpac has produced an (as usual) excellent report on US debt levels and the likely impact they will have on growth for the long term. This is a sobering report but a must read if you want to position


China links

Courtesy of Sinocism: Premier’s use lands fashion firm in hot seat — Shanghai Daily A CHINESE online fashion retailer is being probed for cashing in on Premier Wen Jiabao’s popularity to promote its latest T-shirts – an act that might have violated the country’s law on advertisement, Beijing commerce authorities said. Vancl, popular for its pop


APM’s magical March quarter house price rises

APM has released its March quarter house price data. The release was titled “Australian housing market shows signs of recovery” and here are the headlines: All capitals recorded increases in house prices over March with the exception of Adelaide and Brisbane. Sydney’s resilience continues despite Australia’s highest medians with both house (+1.4%) and unit (+2.5%)


S&P downgrades Spain

Find below the full text of the recently announced Spanish downgrade, which would make Delusional Economics proud (in a sad kind of way): We believe that the Kingdom of Spain’s budget trajectory will likely deteriorate against a background of economic contraction in contrast with our previous projections. At the same time, we see an increasing


The US recovery is thinning

If the new normal thesis holds then the US recovery meme is now running on empty. That’s not say we’re dipping towards a recession, we’re not, I don’t think. But growth is clearly slowing and the mix is getting less convincing. Consider manufacturing expansion, a key plank in the new normal thesis because it is


Roy Morgan Consumer Confidence off the mat

I haven’t bothered with the Roy Morgan Consumer Confidence measure for a few weeks because the moves have been quite small. However, there’s a little rebound developing with three up weeks in  a row: Consumer Confidence is at 112.4pts (up 0.7pts in a week) and up for the third straight week, according to the Roy


NAB Commercial Property Index falls

For those who don’t know, NAB releases a quarterly index tracking commercial property. The two outstanding points this quarter are the ongoing retail carnage, hitting new lows in the quarter, and the optimistic projections that seem to characterise this industry relentlessly. NAB Commercial Property Survey _March-2012 \


DEEWR job vacancies rise

The weirdness of Australian employment data continues today with skilled job vacancies rising again. Despite the general feeling of gloom, both the seasonlly adjusted and trend series are now rising: Monthly Change Increased by 2.6% to 88.5 (Jan 2006 = 100) Increased in six of eight occupational groups Strongest rises recorded for Machinery Operators and


Kohler revises history

If there is one thing that gets the old MB goat, it’s a bit of historical revisionism. Alan Kohler gives us an epic dose today in his Double the egg on the RBA’s face: The Reserve Bank’s economics department had a bad year in 2011, and as a result the board is now high and dry


Soc Gen tells Aussies to buy gold

Courtesy of FT Alphaville, comes the following hatchet job on Australia from Society General analyst, Dylan Grice: When you scratch the surface of the Australian ‘miracle’ you don’’t just find an unmiraculous commodity super-cycle: you also find an equally unmiraculous credit super-cycle as well. A credit bubble built on a commodity market built on an


FOMC statement

Here is last night’s FOMC statement: Information received since the Federal Open Market Committee met in March suggests that the economy has been expanding moderately. Labor market conditions have improved in recent months; the unemployment rate has declined but remains elevated. Household spending and business fixed investment have continued to advance. Despite some signs of


Fairfax to merge titles with Business Spectator?

From Ad News: Fairfax Media and Alan Kohler’s media independent, which houses Business Spectator and the Eureka Report, are in advanced discussions about forming a new unit which would include BRW and Smart Investor under Kohler’s chairmanship. A deal is yet to be inked but AdNews understands both sides are enthusiastic about the prospects, which


What inflation?

And as expected, risks were on down side. 0.1% on the quarter. What inflation? MARCH KEY FIGURES Dec Qtr 2011 to Mar Qtr 2012 Mar Qtr 2011 to Mar Qtr 2012 Weighted average of eight capital cities % change % change All groups CPI 0.1 1.6 Food and non-alcoholic beverages -2.1 -2.5 Alcohol and tobacco


China links

Courtesy of Sinocism: 专访央行行长周小川:利率汇率改革再推进-《财经网》 Key players in Bo scandal may learn fate soon | Princeling’s ex-henchman may escape execution for trying to defect, top officials in HK allegedly told, with wife Gu Kailai likely to be the main culprit.. According to sources who attended the latest briefing in Shenzhen, central government leaders concluded that


Coface puts Australia on downgrade watch

For those that don’t know, Coface is a leading provider of global trade credit insurance. As a part of the this business function it offers sovereign ratings. Today it has put Australia on downgrade watch owing to weakness in the manufacturing sector (among a swath of other actions): Warning : Coface country risk assessment measures the


The politico-housing complex comes!

You can hear the gunning of an engine in the distance. And it’s rapidly turning from an approaching whine to an extant roar. It’s the politco-housing complex and, like some blood thirsty Chevy from a Stephen King novel – panels beaten, paint fading, upholstery thread bare, demonic grin forged in its grill – it’s coming for


The impact of foreign purchases on property

I’m not going to pretend that the following is forensic but with the release late last week of the Foreign Investment Review Board’s (FIRB) annual report, we can now estimate the degree of involvement of foreign purchases in the Australian property market. According to FIRB, residential property recorded 20.92 billion from 9556 approvals: That’s an


China Flash PMI improves a bit

The China Flash PMI is out and shows a small improvement from 48.3 in March to 49.1 in April. Ouput, new orders and exports all contracted at a slower rate: This is welcome. However, a quick look at the charts shows that the trends are all solidly sideways: The global zombie plods on! China Flash


An African iron ore deluge

PhD candidate Luke Hurst of the ANU’s Crawford School of Public Policy has produced new research on the potential impacts of African iron ore on the sea-born iron ore price. I recommend everyone read this paper (find it at the end). It’s solidly argued and a very readable summary of the various arguments put forward


Fearful Symmetry sees India hurt by hawks

A month ago this chronicle was devoted always exclusively to the Union Budget. There was just enough room for fearful symmetry to indicate that it “will be difficult for the RBI to protest about inflation any longer, allowing for a reversal of the excessive late cycle hikes that got fearful symmetry’s dander up last year.” The appropriate positioning of monetary