Houses and Holes

12

Only energy can hurt Russia

Some nice research from the International Energy Agency (IEA) puts recent Russian sanctions in perspective. From LNGWorldNews: Russia is a major exporter of crude oil, petroleum products, and natural gas. Sales of these fuels accounted for 68% of Russia’s total export revenues in 2013, based on data from Russia’s Federal Customs Service, the U.S. Energy Information

11

Denial won’t grow Aurizon profits

Aurizon CEO Lance Hockeridge needs a new speech writer: Aurizon chief executive Lance Hockridge has claimed the expansion of a coal export terminal at Queensland’s Abbot Point will be done in an “environmentally sensitive manner” as he reiterated confidence in Asian demand for Australian resources. “The ‘Chicken Little’ view of resource demand does not recognise

18

Rio plots monster pit

From The West: Rio Tinto is working on plans to build the biggest single pit iron ore mine in the Pilbara, filing environmental applications for a 70 million tonne-a-year monster at its Yandicoogina operation. …The documents suggest the Pocket and Billiard South pit would be about 7.5km long and nearly a kilometre wide. Rio told

4

Are banks slashing mortgage rates out of cycle?

From the AFR: The Commonwealth Bank has slashed its five-year fixed mortgage rate to a record low of 4.99 per cent, offering borrowers the chance to exploit historically low interest rates. The country’s biggest lender said on Wednesday its five-year rate would fall 0.7 percentage points to 4.99 per cent, the lowest rate in the

15

CPI eases

The Australian Bureau of Statistics has just released the June quarter CPI and it’s about expected at 0.5 headline with slightly higher analytical measures. The dollar jumped on the latter. At first blush it looks like tradable inflation is still firmish but the dollar has overreacted because it’s priced for cuts. JUNE KEY FIGURES Mar Qtr 2014

0

DEEWR job vacancies firm

The Department of Employment (DEEWR) job vacancies report for June is out and firmed 1.5%: The trend remains weakly up: Composition was unexciting (economically) with carers taking the gong: Skilled looks more encouraging: No change, really. Insipid labour market. Full report here.

5

Western economists see Chinese mortgage gusher

From Bloomie: Chinese banks will probably offer discounted mortgage rates to their clients in the second half of 2014 as demand in the country’s housing market weakens, according to a Bloomberg News survey. Banks will resume preferential mortgage rates, according to 74 percent of analysts and economists in a survey conducted from July 14 to July 17.

2

BHP dirt monster feasts

Woho! BHP is chucking out dirt like a transformer on steriods. From its Q2 production report: Strong operating performance delivered a 9% increase in Group production with annual records achieved across 12 operations and four commodities. Western Australia Iron Ore achieved a fourteenth consecutive annual production record as volumes increased to 225 Mt (100% basis), significantly exceeding

24

Crisis is the new black! (members)

Gosh, what has MB done? Three years of talking a little truth to power and the business media has gone barmy, too barmy even for bearish little me. Business Spectator may publish the perma-bulls in “Mad” Adam Carr and Craig James but they’re being drowned out by a thumping chorus of doomsayers in Rob Burgess, Callam

9

Q2 CPI preview

From Westpac comes the following Q2 CPI preview (released today): Our Q2 headline CPI forecast is 0.6%qtr/3.2%yr. Core  inflation, as measured by the average of the trimmed mean and weighted median, is forecast to rise by 0.7%qtr/2.8%yr. We estimate that the 6 month annualised pace of core inflation eased back to 2.5%yr in Q2 from

27

Confessions of an unpopular Treasurer

Joe Hockey has released an authorised biography, presumably to further his own leadership ambitions and it’s got some interesting stuff in it. From the AFR: “In reality, the budget was much softer than Joe would have liked,’’ says the book by Madonna King, Hockey: Not Your Average Joe. “He wanted changes to pensions made earlier and the

5

Markets have boxed in the RBA for another cut (members)

The Australian dollar had a volatile night: The prime culprit was the US CPI which eased back from recent highs and showed even more weakness in the internals. From the Cleveland Fed (charts from Calculated Risk): According to the Federal Reserve Bank of Cleveland, the median Consumer Price Index rose 0.2% (2.0% annualized rate) in

12

APRA’s macroprudential-lite upsets banks

From the AFR: In May, amid concerns lending standards were slipping, APRA published landmark guidelines on how it expected banks to manage and monitor their mortgage risks. But a new submission on behalf of the banking industry has hit back at the plan, saying it will add costs and invites a “tick the box” mentality

0

World steel growth solid

From the World Steel Association today: World crude steel production for the 65 countries reporting to the World Steel Association (worldsteel) was 137 million tonnes (Mt) in June 2014, an increase of 3.1% compared to June 2013. World crude steel production in the first six months of 2014 was 821.3 Mt, an increase of 2.5%

0

China bank regulator warns on realty risks

Cross-posted from Investing in Chinese Stocks. The China Banking Regulatory Commission’s (CBRC) Shanghai office is two for two in its previous warnings on the dangers of steel firm borrowing and copper borrowing. Now Yicai is reporting that it’s the real estate sector’s turn. The CBRC’s Shanghai office is warning banks about risks in the real estate market,

7

Alaska’s LNG monster project moves forward

Preparations for a North American gas boom are going gang-busters. From LNGWorldNews: In another important step forward for the Alaska LNG project, an application to export liquefied natural gas (LNG) was submitted to the U.S. Department of Energy. The export application requests authorization to export up to 20 million metric tons per year of LNG for a

12

Captain Glenn on the crisis

Below find Captain Glenn’s much anticipated speech this afternoon at the Anika Foundation. He’s sorely let down markets which were primed for some more dollar jawboning and the currency popped 30 pips during the speech. It is good to see the Captain not using the egregious “North Atlantic” framing of the crisis any longer, as

18

“Mad” Adam versus Ross Garnaut

“Mad” Adam Carr today launches a broadside at Professor Ross Garnaut: Australia does not have a debt problem. Professor Ross Garnaut should stop saying that we do. …Professor Garnaut’s Melbourne Economic Forum appears to have adopted an unnecessarily alarmist position on Australia, our prospects and our prosperity. Debt is only one aspect of their alarmism,

0

China leading index bounces

I can take or leave these leading indexes but the Conference Board version for China just posted a strong result, up 1.3% in June, to 294.0. Forexlive reports that: Follows a 0.7% increase in May and a 1.1% increase in April Five of the six components contributed positively to the index in June Andrew Polk,

2

Should markets be discounting conflict?

Chief Economist at Saxo Bank, Steen Jakobsen, thinks they should: “There are causes worth dying for, but none worth killing for” – Albert Camus The world is increasingly becoming engaged in civil wars and general turmoil where Camus’ words could and should play a central but never will. This article is one of the hardest to