David Llewellyn-Smith


March 24 Links: Radioactive quagmire

Tokyo babies can’t drink its water. Bloomberg Other bad signs. Zero Hedge The quagmire beckons in Libya. Bloomberg PIIGS 10 year yields out again: Ireland, Portugal, Greece. But Spain, Italy, Belgium in. Bounce: $US, Ore, metals . Up: Aussie, energy. Ease: grains. US new home sales at record low. Calculated Risk Why PIMCO sold Treasurys. Zero Hedge BRICS slowing. Gavyn Davies Housing market healthy: ANZ. The Age


Rio has a whinge

Some days rent-seeking is a challenging business. Take Tom Albanese, CEO of Rio Tinto, who today held forth on the evils of government intervention in mining. According to Reuters: Besides, technical constraints, we are also seeing human constraints. We are seeing a combination of resource nationalism in some cases,” he said, citing “difficult governance” in


Links March 23: Uncertainty everywhere

US evacuating base south of Tokyo on radiation. CNN Radioactive rain. Zero Hedge Japan supply damage bad. Alphaville Portugal wants default. FT The Fins now want to stuff Europe. FT PIIGS 10 year yields: Ireland, Portugal, Greece, Spain, Italy, Belgium. Pressure on 2 years as well. Flat: $US, Ore, metals, grains. Up: Aussie, energy. OPEC wants stable oil, at $120. Reuters Civil war in Yemen. WSJ


Gotti is wrong on oil

But should be congratulated for staking out a position, a rare event in today’s world of commentary flip flopping. As Deus Forex Machina likes to say, disagreement makes a market so let’s rip in. Gotti asks: Why should oil prices rise in response to the latest turn of events in Libya? We are already seeing


Links March 22: War rally

Long war. FT Yemen at the brink. FT Bahrain polarising. Mother Jones, WSJ New low: $US. Down: Ore. Flat:  futures for metals, grains. Up: Aussie, energy. Radiation falling. LA Times More food radiation. NYT Japan’s knock-on effects worse than thought. Money Game, The Oz Imagine that? El Erian, QE3 hurdle will be very high. Beyondbrics. Yeh, about as high as 1100 on


Links March 21: Extrapolations

Japan’s severe industrial fallout. Bloomberg Japan’s food fallout. FT, WSJ Japan and commodity fallout. Reuters Japan and local growth. Huy McKay More on the supply chain. Calculated Risk The Libyan war. George Friedman Where are the Arabs? FT All over the place. AFP, Zero Hedge Nobody knows where this is going. The Interpreter Iran calls for


Weekend reading: Crisis drags on

Crisis deepening. NYT Or stabilising. FT Winds to swing towards Tokyo. Bloomberg More radiation released than truth. Zero Hedge Japanese damage. NYT Fukushima described in 1976. Time Japan and local growth. Ian Verrender, Rowan Callick, Michael Stutchbury. Yawn. You read it here days ago. Libyan ceasefire, or not. CNBC Too late to help Libya. Max Hastings


Michael Pettis: China slowing

` Exclusively from Michael Pettis newsletter: Quite a few numbers came out this week, but none of them were especially dramatic or likely to change anyone’s mind about anything. The most interesting thing to me is that there are indications that, once again, the economy may be slowing quickly. Every time Beijing gets worried about too


Late to the party

As governments far and wide wake up to the danger of fallout in Japan, one is tempted to conclude that the crisis is past its worst. Governments have a habit of coming late to the party. But, in this case, I’m not so sure. I continue to think that markets are underestimating the damage being


Links March 18: Worse than thought

Cooling spent rods to take weeks. FT Japan shuts supply chain. NYT Canberra panics late. The Age Japan and the global economy. FT Japan’s damaged ports to hit bulk commodities. The Oz Action in Libya suddenly possible. FT Was it my article that changed Obama’s mind? 😉 Gaddafi threatens everything in response. Reuters Weak: Aussie, $US. Flat:  Ore. Up


How Japan will hit local growth

I am surprised at the resilience of Australian equities to the global sell-off. Either the local market is confident that the crisis can be contained (for some reason I can’t fathom, it’s behaving irrationally, or, it has assessed any economic fallout from the disaster to be minimal for Australia and already priced in). The only


Japan’s critical moment

An hour ago the IAEA released the following: Temperature of Spent Fuel Pools at Fukushima Daiichi Nuclear Power Plant Spent fuel that has been removed from a nuclear reactor generates intense heat and is typically stored in a water-filled spent fuel pool to cool it and provide protection from its radioactivity. Water in a spent


Links March 17: Worst case scenario

Reactor 2 containment rupture. NYT Spent rods exposed at reactor 3 and 4. IAEA Radiation hampering containment efforts. FT US, Britain advise flight. BBC Tokyo closed. Reuters PBS Newshour video on radiation in Japan. Describes how problems are containable, except if radiation prevents workers from being able to do so. Precisely what appears to be happening:


The RBA airbrushes history

Deputy Governor of the RBA, Guy Debelle, yesterday delivered an analysis of Australia’s recent financial history that left a few things out. Let’s take a look: Over much of the past two decades, demand for credit outpaced the growth in deposits, so that banks accessed wholesale funding markets to support growth in lending. This outcome reflected


History resumes

I remember the nineties fondly. They were the years before housing bubbles. The years when cricket still had meaning and moustaches were not yet the gimmick of some new age fad. The years when talent still determined who became famous. And the years when the singularity of American might gave the world a moral centre,


Links March 16: Risk hydra

Monstered: metals, grains, energy, Aussie . Ore eases. $US pop. Trouble at all six reactors now. FT Foreign nationals, companies, flee. FT Reactor core cooling. All Things Nuclear (h/t Naked Capitalism) Excellent Al Jazeera description (all those years of Curiosity Show paying off, though spelling is a problem): Economic fallout. Alphaville China to get hit. Alphaville Ireland will threaten default.


More mangy data

There is more bad credit and sales data out today from the ABS. First, Motor Vehicle Sales: Trend – The February 2011 trend estimate (84 485) has shown a decrease of 0.3% when compared with January 2011. Seasonally Adjusted – The February 2011 seasonally adjusted estimate for new motor vehicle sales (84 122) increased by


The RBA’s message on debt

In today’s Minutes of the March 2011 Monetary Policy Meeting, RBA members had something of a coming out: The household and business sectors in Australia did not appear to be under financial stress, though both continued to show more caution in their borrowing behaviour, as evidenced in slower rates of credit growth over the past


High risks

The US equity market held up pretty well last night but looks to me to be are underestimating risks all around. Poor Japan seems headed toward mutliple meltdowns. Live coverage is available at the BBC. New Scientist reports that assuming meltdowns are occurring then it is only a question of whether containment of the radioactivity


March 15: Crisis resolutions

Meltdown under way at three plants. AP Coverage. BBC Japan’s impact on LNG. Alphaville Reconstruction could be $1 trillion. Zero Hedge Japan’s impact on LNG. Alphaville Metals mixed, copper slumps. Grains, Energy futures stable, gas jumps. Ore eases. $US crunched. Aussie flat. PIIGS relief: Greece, Ireland, Portugal, Spain, Italy, Belgium. Europe fixed! Naah. Naked Capitalism Saudi, UAE troops flood Bahrain. NYT Well … that was quick. Invasion alert. Stratfor (h/t


Japan and Chernobyl (updated)

From The Automatic Earth and author Nicole Foss who has a “master thesis at the law faculty of Warwick University in Coventry, England, where she studied International Law in Development”, in nuclear safety research. She later became a Research Fellow at the Oxford Institute for Energy Studies, where her research field was power systems, with a specific


Into the maelstrom

Let me begin my reiterating my sympathies for the Japanese. There are a number of very big cross currents at work for markets today. The first, of course, if the suffering of the Japanese. Across the world, the coverage is remarkably alike, a result perhaps of diminishing foreign correspondent budgets and the secrecy of the


Links March 14: Cross currents

Japanese tension mounts. The Economist Partial meltdowns. FT Japan before and after. ABC Insurance fallout. Adele Ferguson Corrections. Tim Boreham Metals hit. Bloomberg Japan will need more energy. WSJ Ziggy tilts at the windmill. The Age So does Hamish Macdonald Bahrain edging toward civil war. Komo, FT Europe finds a deal. FT FOMC preview. Calculated Risk


Japan fallout

Right now we do not know what is happening in Japan’s nuclear reactors. According to CNN, however, the news is very worrying: A meltdown may be under way at one of Fukushima Daiichi’s nuclear power reactors in northern Japan, an official with Japan’s Nuclear and Industrial Safety Agency told CNN Sunday. “There is a possibility,


Weekend Reading: Confusion

Metals, Grains, Energy futures crushed. Ore smashed. $US crunched. Aussie rocket. Bifurcating PIIGS: Greece, Ireland, Portugal record wides; Spain, Italy, Belgium relief. All tsunami news. FT Drunken skyscrapers. You Tube Saudi’s day of saturation police presence. FT Forget Saudi’s increasing production. Jim Hamilton Gaddafi to prevail. FT Kuwaiti protesters gassed. Zero Hedge US job openings fall, consumer confidence hit. Calculated Risk US still deleveraging. Zero Hedge More


Will the Five Year Plan kill commodities?

A couple of pieces from around the world in the last few days set up an interesting and crucial debate for Australia vis-a-vis China’s new Five Year Plan. The first is by long-term China watcher and economic heavy-weight, Barry Eichengreen: China has been able to grow so rapidly by shifting large numbers of underemployed workers


Links March 11: Pick your poison

Metals solid. Grain futures spanked. Energy futures crushed. Ore eases. $US rocket. Aussie smashed. It’s China’s fault. Bloomberg It’s oil’s fault. FT Portugal, Greece, Ireland to default. Eurointelligence PIIGS relief. Greece, Ireland, Portugal, Spain, Italy, Belgium. German idiocy. Zero Hedge More planning for no fly zone. Bloomberg Gaddafi gains. Reuters US housing plunges to new low. Calculated Risk US deficit yawning. Calculated Risk Fed to


Links March 10: Relative calm

More pain for PIIGS:  Greece run. Ireland, Portugal, Spain, Italy, Belgium. Obama’s no fly zone is looking like PR. FT Libyan war. FT $US sideways. Grains futures flogged. Metals crushed. Energies, gold flat. Greece reaches do or die. To Vima (h/t Calculated Risk) Ireland up for haircuts. Labour (h/t Calculated Risk) PIMCO dumps all Treasuries. Zero Hedge No OPEC capacity increase. Reuters


Shocked consumers

In my previous post on Phil Lowe’s speech, I noted that the RBA is hawkish and clearly still concerned that consumers will binge as mining boom income passes through the economy. The killer quote was: Not unexpectedly, this decline in the relative price of manufactured goods has caught the attention of the household sector. In