David Llewellyn-Smith

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Links December 7: The new bubble

Europe’s ponzi mechanism. VOXEuropean wrap-up. EurointelligenceEuro to fall. BloombergOut: Ireland, Portugal, Spain, Italy, Belgium, GreeceUS bank failures. Calculated RiskChina’s listed commune.AsiaOneAustralia’s low inflation history. Henry ThorntonIndian iron ore exports still stuck. MineWebScramble for coal. The OzMore ore. SteelOrbisMajor metals 2011 forecasts. Australian Mining

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AFR redux

You might wonder why a blog dedicated to the analysis of risks to the Australian economy would bother to assess the decline of Australia’s leading business newspaper. But today there are two reasons to write about the Australian Financial Review (AFR), one short term, one long. The immediate concern is the resignation of Fairfax CEO

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Mind the gap

The great foreign policy analyst, Coral Bell, has often described in public how there is always a gap between a countries’ declared foreign policy and its actual policy. That is what one half of diplomacy is all about: Maintaining the gap. Hence the 17th century adage attributed to Sir Henry Wotton that ‘an ambassador is

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Links December 6: The Great Straddle

Wikileaks on Rudd. John GarnautBank reform released Wednesday. Peter MartinSFW please. GittinsIrish default. IndependentHouseless, cold, lonely, persecuted. Financial AramggedonGlobal ubermencsh II. Baseline ScenarioWeek ahead for the DOW. Calculated Risk2011 China rate rises official. NYTISM not all good. PragCapVale’s plan. BusinessWeek

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More bank reform leaks

From the SMH today: Treasurer Wayne Swan will this week unveil his long-awaited package of measures to rein in the banks and boost competition in the sector. A senior Labor source confirmed Mr Swan would present his reform package to cabinet when it meets tomorrow. He will then make final adjustments to the package, which

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More reading…

How to leave the euro. The Economist2011 markets. FTChinese inflation. Doug Noland Return of the vigilantes. FTUS unemployment, the ugly graph. Calculated RiskETF madness drives JPM copper squeeze. Zero HedgeHugh Hendry on global macro. Zero Hedge

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Weekend reading: US not

What happens to big houses after the crash? FOXNo FDR. Krugman, Palley (h/t nakedcapitalism)US’ very disappointing employment report. Calculated RiskThe job creation needed for recovery. Zero HedgeGold signals QEIII. KitcoBob Janjuah’s yeah right. Zero HedgeNew Glass-Steagall. Thomas HoenigRemember ForeclosureGate? EuromoneyGlobal übermenschBaseline ScenarioTrichet fights. Gavyn DaviesECB splinches vigilantes. Zero HedgeIreland, Portugal squeezed. Greece, Spain, Belgium in

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Will EQE weaken the euro?

The FT has an interesting take on whether or not EQE would weaken the euro, a key contention by this blogger in its assessment that the Aussie dollar is headed for weakness. Let’s take a look: Silver denarii were often debased by mixing in lesser metals when the Roman emperor needed more money to raise

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Witching hour

Banking Day reports that the witching hour for bank reform is upon us: Momentum may be reaching a peak over the federal government’s activist policy package on banking, with talk of an announcement by the Treasurer, Wayne Swan, this Sunday. Speculation over the contents of the policy plan is centring on a widening of the

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Miraculous correction

A few weeks ago this blog pronounced in the post ‘Pricing the miracle commodity’ that: … the contract price for Rio is currently hovering in the high $150s per tonne and BHP slightly below that. Looking at the current quarter (Q4) for clues to contract pricing for next (Q1), to date the average price in

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Links December 3: ‘Tis the season…

All in. Greece, Spain, Ireland, Portugal, Italy, even poor BelgiumMetals Party. BarchartCoal to soar on weather. The OZUS pending home sales rise. Calculated RiskUpside surprise for US jobs? Barry RitholzChinese leading indicators soft. Zero HedgeEuropean bond crisis vs Asian financial crisis. Baseline ScenarioNegative gearing exposed again. The Unconventional EconomistDeep T.’s crusade. Delusional Economics

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Internecine

There’s a war going on in Canberra. It’s being fought between the Reserve Bank of Australia on one side and the Treasury allied with the government on the other. This blogger has no special leak to offer, nor insight from the generals that are directing the battle, but the war is now out in the

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The fifth pillar

Australia’s best business journalist, Adele Ferguson, has a scoop today on what the government’s new competition measures will look like. From the SMH: Wayne Swan is poised to unveil controversial measures to create a fifth pillar of the banking system using the muscle of the $73 billion credit union and building society industry. It is

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Well, glad that’s over

It’s all ‘risk oooaaarrrrn’. And this blogger doesn’t buy it. EQE can’t save the euro. It can only devalue it. That stuffs the current macro settings for reflation and sooner rather than later the markets will realise it. The US recovery cannot carry the world without a falling dollar even given it’s slow strengthening. Moreover,

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Links December 2: EQE rally

Here comes EQE. FTOr massive IMF pool. Zero HedgeWhat’s wrong with poor old Belgium? Spreads widen. All else in.Clear macro weaknesses. Martin WolfIreland the rise & crash. NYRB (h/t nakedcapitalism)Politics to kill Europe. Michael Pettis, Barry Eichengreen, Yves SmithUS bond bubble bust. MarketWatchFinancialisation of commodities. VOXThe fifth pillar. SMH Australia’s shitty growth. Tim Colebatch (h/t

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Aussie at the brink?

That looks like a pretty tight head-and-shoulders top on the Aussie battler. The neckline is already busted and its along way down to the waste. For extra frisson, have a look where it was trading during the last bout of European debt woes in May. Time to buy those $US travelers cheques… Though you didn’t

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Fish food

Carassius auratus auratus, the common goldfish, a much maligned creature, rumoured to have a memory-length sufficient for one circuit of its bowl. What do Australian business readers have in common with this humble fish? There’s the easy life and danger of obesity. Certainly a small pond. And there’s one more similarity. The presumption of their

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Fitch as a fiddle II

The Age via Bloomberg reports this morning that: Australia’s banks and insurers would find the fallout following a 30 per cent tumble in house prices ”manageable”, Fitch Ratings said yesterday, as it released partial results of a stress test. Whilst this blogger is reassured that Fitch has passed the mortgage complex, it might have been

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Links December 1: Solvency not liquidity

Ireland, Portugal in a little. Spain, Greece, Italy, Belgium widen.EU corporate bonds widening. FTMarket focussed on solvency not liquidity. Eurointelligence, AlphavilleUS dollar up, euro/risk down. BarchartMetals decoupled.RBA, APRA wary of covered bonds. The OZBank porn. SMHMore bank porn. The Age on FitchBubble porn. SMHMore bubble porn. Peter van OnselenUS house prices slide again. Calculated RiskUS

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Atlas shrugged

Reader Atlas has down the heavy lifting and answered this blogger’s challenge in fine style by explaining Michael Stutchbury clearly for us all: …isn’t Stuchbury simply saying: a) much of the media has missed the point in that the RBA is saying we need to allow big banks fail without it killing the economy;b) this

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The RBA’s RMBS anxiety

The RBA appears to be running interference against interests in favour of a Budget guarantee for securitisers. From a speech today by deputy governor Guy Debelle: In thinking about the AOFM support for the RMBS market, I believe the AOFM program has a number of advantages relative to alternative means of support: it can be

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Credit aggregates unchanged

The RBA released the October credit aggregates this morning and what the RBA itself defines as ‘modest’ credit growth continues. Owner-occupier mortgage debt was up 7.1% annualised and investor mortgages 6.9%. Other personal loans clocked up 5%. Business credit is still in serious decline, down at a 9.3% annualised rate. No sign here of any

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Reflation toast

The SMH reports this morning that: Europe’s credit crisis could help with Australia’s borrowing efforts by alerting investors to the economy’s strength, says the departing head of the government’s debt management agency. Neil Hyden, who retired last week as the chief executive of the Australian Office of Finance Management, said Europe’s woes had not tainted

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Links November 30: Worse than May

World bank: No double-dip. Sell now. ReutersContagion rampant: Ireland, Portugal, Spain, Italy, BelgiumCDA carnage hitting core. Zero HedgeBailout fail. GuardianFour scenarios for Europe. Simon JonsonNot waving, drowning. Paul KrugmanEQE. Zero HedgeEuro growth to be hit. BloombergImproved US indicators. Calculated RiskOrderly transition vs markets. El-ErianDepression back on. Megan McCardle. The Atlantic$US just begun to rise. Money

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Aussie toppy?

An extraordinary article at Seeking Alpha caught this blogger’s eye today. In it, one Ananthan Thangavel argues that the Aussie dollar is better than gold. There can be no surer signal that you are close to a top than when boffin traders announce your currency is more valuable than the yellow metal. And sure enough,

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The Six Million Dollar Central Bank

This blog delivered the RBA a bit a of a serve for inconsistency late last week after the boffins’ appearance in Parliament. Having read the hansard, however, what is also obvious is just how much the RBA is rebuilding itself from the ruins of the crashed debt pilots of yesteryear. Let’s take a look. Gone

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Mondayitis

Late last week, the blog Data Diary posted on the dynamics of how a Chinese slowdown would trigger an Australian bust. According to the capital market community that is ‘short’ the banks and commodity giants: 1) Australia has had a massive terms of trade boost as a result of the Chinese property building boom. This

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Links November 29: Better than gold

Aussie dollar better than gold. Seeking AlphaIreland should default. MishIrish on the streets. NYTWeek ahead for the DOW. Calculated RiskEuropean crisis cheat sheet. Zero HedgeItaly next? VoxCDS to blame. WSJAll boom ahead. Barf. Gittins.Suncorp calls for Wallis. The OzRio: pedal to the metal. The Oz

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Not all populism

This blogger has just finished reading the hansard of Glenn Stevens’ parliamentary appearance on Friday. Although completely unreported, there was this excellent exchange between Kelly O’Dwyer and the Gov: Ms O’DWYER—Our task is to draw you out! Mr Stevens—Indeed it is—and my task is to try not to be drawn too much! Ms O’DWYER—Indeed. I