Houses and Holes

5

December 5 links: Rates line ball

Week ahead for Dow. Calculated Risk Don’t believe Black Friday hype. Barry Ritholz Germany prepares Commerzbank nationalisation. Zero Hedge Italy commits to tax hikes. FT 3.5% of GDP over two years… China services PMI crashes. Zero Hedge China readies for unrest. FT Markets price rate cut. SMH Gittins supports surplus. SMH Whilst accusing everybody else of bias… Dark

9

Clearing derivatives

Guest post from Satyajit Das: The key element of derivative market reform is a central clearinghouse, the central counter party (“CCP”). Under the proposal, standardised derivative transactions must be cleared through the CCP that will guarantee performance. The debate surrounding the CCP provides an insight into the problems of controlling countreparty risk, complex interest of

60

Labor to cap private rents?

There a few versions of a story floating around today about the Labor government considering price caps on private rents: The Real Estate Institute of Australia has slammed the Labor government’s proposal to cap rents in Australia REIA president Pamela Bennett said capping rents would be “disastrous” for rental affordability and the property market. Earlier

0

China links

Courtesy of Sinocism: Kai-Fu Lee & The China Tech Fantasy | TechRice– Given how separate China’s Internet now is, a better title might be “One World, Two Internets.” But that, of course, would be undiplomatic again as it frames the issue as China vs. the World rather than China vs. America.At least Kai-fu Lee is

35

The Poms led the rescue

There’s a great story from Reuters at the SMH today: Britain orchestrated this week’s bold move by central banks to stave off a cash crunch in global markets, helping drive a plan that began to take shape around 10 days ago. For months, central bankers have tracked with growing concern how the deleveraging among European

39

Ralph Norris takes his leave

Former CBA CEO Ralph Norris left yesterday with a parting message for the government and nation. From the Herald Sun: Outgoing Commonwealth Bank chief executive Ralph Norris has warned the Government that it must get its act together or risk losing overseas investment. In his last day at the helm of the nation’s biggest bank,

11

December 2 links: Calm after the storm

Down: Treasuries, $US, gold, metals, energy, CRB, grains Up: ore Flat: euro, Aussie Contagion: Greece 2 Year 5 Year 10 Year Portugal 2 Year 5 Year 10 Year Ireland 2 Year 5 Year 10 Year Spain 2 Year 5 Year 10 Year Italy 2 Year 5 Year 10 Year Belgium 2 Year 5 Year 10 Year France 2 Year 5 Year 10 Year Germany 2

9

What’s between now and the RBA meet?

For those of you wondering, above is a list of the data flow between now next Tuesday’s RBA meeting. The only two of any influence will be TD Inflation and ANZ job ads. TD  monthly inflation was benign last month and there is no reason to expect that to change this month. ANZ job ads are unlikely

4

Roy Morgan consumer confidence slumps

Roy Morgan has released its weekly consumer confidence and confirming today’s lousy October retail sales number, the post June confidence pulse is just about exhausted: Consumer Confidence fell to 109.7pts (down 3.4pts in a week), according to the Roy Morgan Consumer Confidence Rating conducted last weekend (November 26/27, 2011). Consumer Confidence is now 10.9pts lower

13

North Asia’s PMI blues

Bloomberg reports that China’s official PMI has confirmed the weakness apparent in the Flash PMI last week: China’s manufacturing contracted for the first time since February 2009 as the property market cooled and Europe’s crisis cut export demand, a survey showed. The Purchasing Managers’ Index fell to 49.0 in November from 50.4 in October, the China Federation of Logistics and

7

Retail pulse fading

Fresh from the dreadful building approvals numbers, the ABS has served up lousy retail sales: That’s 0.2% growth for October and shows a clearly fading pulse from the mid year unleashing of pent up demand triggered by the plateauing of rates. I mooted last month that with the savings rate having plateaued, retail sales may

57

The Melbourne building bubble bursts

ABS October building approvals are out and the numbers are ugly:   \             Just two months ago we had a big pop in approvals and is gone with interest. Here’s the chart: If we look at the components, it’s also ugly: The falls in non-housing construction are bad: But

67

Lower dollar boosts manufacturing

The Australian PMI is out and shows a sideways movement of continued contraction at 47.8. There’s some good news, however, with new orders growing steadily towards expansion: We can’t tell precisely, but much of the improvement is coming from jumping export orders, the index for which has rocketed since the dollar came under pressure in

81

Today, equities are right

We all know that the kind of jumps that we see regularly in the equity market these days are a symptom of its illness (at least, we all should). That is, in a healthy bull market, you don’t get 3%+ daily jumps almost ever. These kind of swings are typical of bear markets where the

6

December 1 links: Central banks ride to the rescue

Down: Treasuries, $US Flat: ore Up: euro, Aussie, gold, metals, energy, CRB, grains Contagion: Greece 2 Year 5 Year 10 Year Portugal 2 Year 5 Year 10 Year Ireland 2 Year 5 Year 10 Year Spain 2 Year 5 Year 10 Year Italy 2 Year 5 Year 10 Year Belgium 2 Year 5 Year 10 Year France 2 Year 5 Year 10 Year Germany 2

15

Invisopower! gives way to blog power

One of the joys of the blog form is that it the work of a collective mind. Not a borg collective of automatons but a group of specialist individuals and readers that can contribute their various skills and insights to a much clearer understanding of what the hell is going on. This stands in stark

6

China links

Courtesy of Sinocism: China’s online supermarkets, a great entry-platform for internationals – xinhua-China’s flagship literature magazine launches English version – Pathlight: New Chinese Writing – MW Reiterating Strong Sell on FMCN | Muddy Waters Research – Focus Media Responds Further to Muddy Waters Allegations — SHANGHAI, Nov. 29, 2011 /PRNewswire-Asia-FirstCall/ – – South Asia’s water: Unquenchable thirst | The Economist –

15

Invisopower! detected

Regular readers, especially those going back to my inglorious days at Business Spectator, will no doubt be celebrating with me that someone in the MSM has donned the invisibility detection glasses and seen the Predator-like shimmering fog surrounding the banks wholesale funding. Something that I dubbed Invisopower! late last year. Michael West is on the case:

47

Capex rocket takes off

Capex is out and is the one positive Australian story that just keeps on giving. First the September quarter actual spending estimates: The trend estimate for total new capital expenditure rose 8.2% in the September quarter 2011. By asset type, the trend estimate for buildings and structures rose 11.3% and equipment, plant and machinery rose

1

New home sales rise from the floor

New home sales have posted a modest 5.5% bounce in October. They are still languishing, however, as shown in the above chart. As Ross “pull no punches” Gittins would say, off to the Pilbara with you builders. Full release from the HIA below: 2011-10 NHSS National Media Release

29

House prices continue to melt in October

R.P.Data results for October are out and it’s an ongoing Spring thaw, 0.5% down for the month seasonally adjusted, with an adjusted figure for September doubling the fall to 0.4%. Here’s the chart: And raw: And the R.P. Data House Price Index over time: As well as, real house prices: And finally, state by state

1

European trade contagion hitting China

A few weeks ago I posted on European trade links to the other major economies. In the post a produced the following chart on Chinese exports to the EU27: So, the EU is China’s largest export destination. Now, from Bloomberg today comes this: Slumping shipping costs show exports to Europe from China are “falling off a cliff”

15

Can the US economy decouple?

Last night’s Wall St trade took heart from a big jump in the Conference Board consumer confidence figures. It is great that the US has weathered its QE2 withdrawal and deficit ceiling debacle, but we should bear in mind that the index only rose to July levels, which are still very suppressed: Despite this,  yesterday the

15

Euro in a death struggle

We haven’t seen John Talyer for a few months or so, since he forecast Western recessions and a rocketing $US. Clearly I agree with those calls and they look more and more prescient now. Today he has some very interesting things to say about currencies:

1

November 30 links: Undollar love

Down: Treasuries, $US, ore (1%) Up: euro, Aussie, gold, metals, energy, CRB, grains Contagion Greece 2 Year 5 Year 10 Year Portugal 2 Year 5 Year 10 Year Ireland 2 Year 5 Year 10 Year Spain 2 Year 5 Year 10 Year Italy 2 Year 5 Year 10 Year Belgium 2 Year 5 Year 10 Year France 2 Year 5 Year 10 Year Germany 2 Year

11

MYEFO OMG

So, the MYEFO delivers a $20 billion black hole that is filled by fiscal cuts over the next four years. I’m going to leave a detailed analysis of this beast to Delusional Economics tonight. Right now I’m just going to take a few moments to run through the assumptions behind the updated forecasts to give

40

Mining projects go ballistic

From NAB today comes this little note on a big subject, the developing pipeline of major mining projects: AUS: Resource project listing sky-rockets to $232bn from $173bn in April Prior to the release of the Government’s mid year review of the Budget this morning, an updated listing of major resource development projects has also been

44

Swan’s unpopular razor

From AAP this morning: Deloitte Access Economics director Chris Richardson said the government planned to cut spending when the Reserve Bank of Australia (RBA) had cut its cash rate in early November. The RBA cut the cash rate from 4.75 per cent to 4.5 per cent to provide some stimulus for a slowing economy. “What