Houses and Holes


Joye exposes Cormann’s FOFA clap trap

The AFR sure doesn’t know a story when it sees it, today burying another barn burner from Chris Joye in favour of this drivel at the top: And back to the story that should be headlining: When politicians are allowed to mislead the public it fundamentally undermines community confidence in our system of government. …Under the FoFA


Credit card debt still on the nose

From COMMSEC: Figures released from the Reserve Bank show that the average credit card balance rose by just $8.60 (0.3 percent) to $3,235.60 in May. The average credit card balance was flat on a year ago. In smoothed terms (12 month average) the average balance was down by 1.9 per cent. Of credit cards attracting interest


US has happy economists, Oz depressed ones

Courtesy of the SMH blog: The chart below, from Colonial First State’s James White, shows the cumulative difference between the actual GDP growth figure for the quarter and what economists forecast the number would be, using Bloomberg data. …perhaps it’s a case of good ol’ American patriotism set against that well-documented Aussie quirk: tall-poppy syndrome. This result is counter-intuitive.


CBA invokes the old “rogue trader” trick

From Adele Ferguson at the SMH today: Former Commonwealth Bank chief executive Ralph Norris’ attempt to dismiss the bank’s financial planning scandal as nothing more than a few “rogue people” is public relations trick 101. …For instance it doesn’t explain why those so-called rogue planners, including Don Nguyen, were rewarded and promoted. Nor does it


“Mad” Adam sees monster recession

“Mad” Adam Carr of Business Spectator is out today with a fire hose full of napalm: The budget debate and recent Senate theatrics gloss over what is in truth a much broader malaise. No one should be under any false pretense: the Senate could pass the budget in its entirety and it would make no difference


More on Goldman’s rate cut call

Here’s some more from Tim Toohey on the forthcoming RBA rate cut: From our perspective, while it is encouraging that financial markets increasingly share our view that interest rates in Australia are more likely to decline than increase in the year  ahead, we continue to see the greatest probability of an interest rate reduction in


The Coalition’s carbon debacle for business

Citi nicely captures everything that’s wrong with the Coalition’s carbon policies today: Huge Uncertainties — There remains considerable uncertainty around whether and in what shape the repeal bill, and the government’s proposed Direct Action scheme bill, will be enacted. Running company valuation scenarios seems unproductive, given the rapidly moving political landscape. On balance, we expect  the


Assessing the Chinese steel cycle

Morgan Stanley has some nice charts today summarising where we are in the Chinese steel cycle. The changing composition of Chinese growth, that many miners see as a positive, is obvious in steel prices with consumption related steel up and construction related steel down: Because construction related steel is a much larger consumer of tonnages


Why Bill Evans is wrong this time

In his weekly address, Australia’s leading interest rates prognosticator, Bill Evans, argued that the interest rate doves have it wrong: The balance of partial indicators suggest that growth momentum in the Australian economy has slowed markedly over the last three months since the lead up to the federal budget. Because most high frequency data is


More moves to slow credit in China

From Reuters today: Chinese banks must create a firewall around increasingly popular wealth management services, the country’s banking regulator urged, in order to avoid any contagion from higher risk products spreading to normal bank loans. Banks must establish a separate department to carry out wealth management business by the end of September, the China Banking Regulatory Commission


Can confident business carry dour consumers? (members)

Last week saw the continuation of a recent divergence that’s going to play a very significant role in determining Australia’s growth rate in the year ahead. Consumer confidence remained weak but business confidence remained strong. Indeed, Westpac’s Red Book offered a spectacular chart illustrating that this divergence is now at its widest ever: Why is this? Does


Housing sector to stall

Cross-posted from Martin North’s DFAblog. Reflecting on the ABS data released today, and already covered here, and putting that into context of our household surveys, we think momentum is changing and the housing sector could stall in coming months. Demand for new finance fell 0.8% in May. Whilst refinancing remains quite buoyant, thanks to low rates,


US closes to North Asian steel

The US is increasingly moving to close its markets to North Asian steel producers. From Bloomie over the weekend: The Obama administration imposed duties on steel pipe from South Korea and eight other nations in a victory for U.S. Steel Corp. (X) and the United Steelworkers union, which said they were hurt by unfair competition from overseas. U.S. Steel rose


Fortescue falls short on volumes

Fortescue is out with June quarter production report today and it has missed slightly on expectations shipping 38.7 million tonnes (mt) of iron ore for the quarter and 124.2mt for the year. It’s now operating above nameplate capacity at an annual rate of 160mt per annum. If there’s iron ore rationing going on it does


Iron ore blood begins to flow

After yesterday’s news that the town of Pine Creek is in the gun comes this from the West Australian: Kimberley iron ore miner Pluton Resources is teetering on the brick of disaster, warning shareholders yesterday it faces a struggle to remain viable if it cannot raise at least $47.5 million through a rights issue. Pluton


MS on the Atlas beat and bash

Morgan Stanley on Atlas’ production beat yesterday: Atlas reported 4Q’FY14 production which beat company guidance and MSe. However, the beat was led by the early delivery of the 12Mtpa expansion and should only be viewed as a timing effect. The product splits between the Standard and Value Fines products were in line with MSe, which


Ratings agencies feed and fatten Australia

David Uren has some reassuring words for us from credit rating agencies today: None of the three major agencies believes Australia’s AAA credit rating is in jeopardy from the budget debate, with the economic outlook seen as the greater risk. Standard & Poor’s associate director Craig Michaels said…“We would expect to see some compromises made


“Inconvenienced” Murray Inquiry to strip regulation?

You’ll be reassured to know that: SENIOR bankers are coming to the view that the David Murray-chaired financial system inquiry will set aside submissions from key regulators and push for a simplified regulatory structure in its final report, due in November. …While careful not to give too much away, the chairman, according to sources, has