Houses and Holes

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Wholesale debt WTF

According to Banking Day: Australian banks are operating in an environment where they face an ongoing risk of funding constraints, a leading banker said yesterday. National Australia Bank’s group executive for business banking, Joseph Healy, said big Australian banks were reliant on offshore term debt and were among the largest global debt issuers. Speaking at

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New lobby for (non-mining) exporters (updated)

According to the SMH today: The surging Australian dollar ranks as a far bigger influence on profitability than the threat of further interest rate rises, a survey of chief executives says, in a sign of the growing strain the currency is placing on many companies. The Australian Industry Group CEO survey, to be published today,

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Links Oct 13: BW2 RIP

The end of BW2. Tim DuyMisplaced faith in the Fed. David RosenbergBan these now. WSJGlobal bank resolution hits a hurdle. FTChina snubs Norway. Pleasant, our new friend. FTThreats to BHP’s Potash bid. Matthew StevensProductivity versus aging. Peter Van OnselenGoldman raises gold target. Sell. Zero HedgeWill Wall St pull a Mac Bank? ForbesOre price ramp established.

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It’s all good!

Here’s today’s breathless piece of drivel. From Simon Johanson of the SMH: House prices will continue to grow by up to 20 per cent over the next three years despite interest rates hitting a peak of 9.1 per cent, a respected business forecaster said today. A QBE Housing Outlook 2010-2013 survey compiled by BIS Shrapnel

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Houses and holes

This blogger sees economies in three categories. There are pre-modern economies which produce largely commodity output. There are modern economies which produce knowledge and manufacturing output. And there are post-modern economies that produce nothing but huge numbers of transactions around assets and business services (especially the financial variety). Australia used to have a balance of

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Links Oct 12: More Foreclosuregate

Banks react to Foreclosuregate. Naked Capitalism I, II, IIINot for the faint of heart. Chris Whalen (missed these) I, IIWill it freeze the housing market? BloombergYes, it will. The Whisperer (h/t Unconventional Economist) Suggested solutions. Oh my… Felix Salmon And, bugger me, some mainstream Australian coverage. Adele FergusonSwiss take bank regulation seriously. EconomistBut it’s all

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Insecuritisation

From this morning’s SMH comes a report about developments in a less well known dimension of the great Australian bank bailout, the securitisation market: REGIONAL banks and other small lenders have begun talks with the Gillard government seeking a third extension to the $16 billion residential mortgage-backed securitisation program that forms a key funding support

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Links Oct 11: Decoupling my butt

Decoupling my butt. David Uren, Dani RodrickChina property bubble deflating. Andie Xie40 US states going after foreclosure data. NYTWho’s to blame for Foreclosuregate? Stephen PearlsteinRobert Reich on GFC aftershock. Jesse’s Cafe AmercainWeek ahead of the Dow. Calculated RiskSmall banks go the handout. SMH

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2008 redux (updated)

I won’t make a habit of posting on weekends but this is important. Grain markets are dislocating upwards. Oil has surged 14% in two weeks. The Aussie is threatening parity. Gold is rocketing to new highs. Everyone is on one side of the emerging markets trade. The Dow is powering on easy money. BHP is

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Weekend reading: Black Swan 2.0

Foreclosuregate: What is it? Zero HedgeThe banks’ immediate problem. Karl DennigerThe bigger problem. Chris WhalenAnd how it will freeze markets. Felix SalmonThe MERS monster. FT AlphavilleThe effect on home sales. NYTThe pain and the progress. Janet Tavakoli Other stuffAlcoa earnings bullish for commodities. Money GameShocking US employment report. Calculated RiskSoros does China. George SorosMapping the

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Unpleasant scenarios

The blowoff in gold and oil must mean that we are rapidly approaching the zenith of this charming QE2 rally, which has morphed swiftly into outright currency war. Helicopter Ben is now completely boxed in by the stock market which has rightly interpreted his Jackson Hole pledge to print money “if” needed as a rock

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Links Oct 8: Currency chaos

More join the currency war. BloombergWhere the US takes it next. Robert ReichCurrency volumes explode. Reformed BrokerIMF: no mood for accords. BloombergDutch Disease alert. But that’s ok because we’re making “space for those parts that have to grow over the next 12 months or so”. Bloody hell. We need a new tradable goods peak body

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One chart to rule them all (updated)

After this blog’s recent Housing Velocity post, in which a comparison was made between total housing turnover and population growth, reader Torchwood1979 made the eminently sensible suggestion that we strip dwelling commencements from the figures and see what happens. Well, here it is: Established dwelling sales from 1991 to 2009 in major Australian states. One

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Links Oct 7: Bulls versus bears

Correlation bubble. FT AlphavilleMore like everything pricing for QE2. Zero HedgeADP tank signals QE2 ahead. EconompicGoldman says buy Euro. Sell it. Zero HedgeDow overbought. PragCapWanna be right or make money? Barry RitholzThat definitely looks like a cup and handle on the ore chart. BloombergMatched by another little one on the Baltic Dry.And more. BloombergSwift revaluation

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Reserve Bank of Lilliput

Delusional Economics does a nice hatchet job on comments by RBA boffin Luci Ellis about the housing bubble. Sadly, however, there is more to dismember on the currency front. From Business Day: Reserve Bank of Australia (RBA) Head of Financial Stability Luci Ellis says the poor strength of the US dollar is no surprise, given

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Links Oct 6: Rates fallout

McCrann not wrong, RBA “confused”. Terry McCrannBig banks will raise unilaterally soon. John DurieJapan prints and buys the lot. FT AlphavilleUS-China trade war will only benefit Vietnam. NBOUS double dip still on. Rosenberg at PragCapStimulate the US. George SorosUS services grow. EconompicThe BHP/Rio zombie is dead. Der. SMHIs that a cup and handle formation in

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Egg all round

Yes, and some of it on this blog’s face. Though it did at least take the Joye/McCrann drivel to task. Both the RBA and the banks have suddenly backed off on rate rises (at least for mortgages). This blog can’t figure out if this is a wildly bullish or bearish signal. Probably neither. For clues,

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Take it for the team (Updated)

This blog does not have a great deal of sympathy for complaints about bank gouging when it comes to interest rates. The reason is simple. If a nation wants to run a housing bubble based upon foreign borrowing then it should accept the logical consequences – that sooner or later competition will collapse around too-big-to-fail

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Links Oct 5: Rates day

Damn the lifeboats. Henry ThorntonFiscal cuts too. Tim ColebatchChina serious about busting bubble. Peter HartcherAnd the real problem. John GarnautSteel demand set to rise. FTBut not prices. Metal MinerOre prices still falling. Economic Times of IndiaThe bubbles that just won’t pop. Edward ChancellorChina will do what it wants with yuan. BloombergWhat can QE2 achieve? Econbrowser

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Housing velocity

Population growth is often cited as a causal factor in the overvaluation of Australian real estate. And indeed, strong population growth is a factor, particularly in recent years when housing starts have diminished, most especially in NSW. But one infrequently quoted housing statistic that calls into question the strength of population growth causation is what

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Links Oct 4:

Forget a rising yuan. Baseline ScenarioEuro is toast. Joseph StiglitzWeek ahead for the Dow. Calculated Riskde Gaull’s revenge. French plot new reserve. Zero HedgeBHP a length ahead for Potash. The AusCopper breaks free. BloombergAs inventories dive in London, NY and Shanghai. Metal PricesDutch Disease or overheating. You choose. David Uren

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RBAsymmetry

Terry McCrann wrote of the RBA on Saturday that: The belief that it won’t lift the cash rate on Tuesday is based on a fundamental misconception of what the RBA is trying to achieve and a misunderstanding of how and what it reads in the statistical tea leaves. Simply, brutally, it is not trying to

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Weekend reading: US bumps along the bottom

US double dip still looms. Calculated Risk, Zero Hedge, EconompicBut ECRI coming off the bottom. Pragmatic CapitalistGolden Cross another Hindenberg Omen. BespokeGold flattens equities. The EconomistPrint or be damned. Zero Hedge I, IICommodity inflation shock coming? BespokeMapping the US view of Europe. Are we so different? kottkeNAB’s drama queens. The AgeSlash spending and jack up

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Invisopower!

There are a couple of breathless reports today, one from Eric Johnston and another from David Uren, on yesterday’s announcement that the RBA now has financial stability as an official part of its mandate. Both are at pains to report that not only has the remit been expanded it’s been limited too. Uren quotes from

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August credit = rate rise

Well, the RBA’s DO2 is out again and there are some noteworthy things happening. Seasonally adjusted owner occupier mortgages grew at 6.6% annualised and investors at 9.2%. Combined growth was 7.4% Credit cards are still on the nose, down 2.2% and despite all the nice advertisements, business lending fell 6.4%. Whilst housing credit hasn’t fallen

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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