Houses and Holes


Fearful Symmetry sees a slowing India

A month ago Fearful Symmetry spent the bulk of this chronicle detailing the weakening trend in the partial domestic activity data, highlighting the weak international macro-financial and real economy backdrop and underlining the threat posed to the domestic investment cycle by protracted period of soft capital inflows.The September quarter national accounts provided some early justification for


Is the ANZ mad?

Something very important just happened. In truth, it isn’t new, but it’s been made official. The ANZ will now set its interest rates completely independently of the RBA. According to the SMH: ANZ Bank has moved to avoid the “treadmill” that follows Reserve Bank rate changes by introducing a regular monthly announcement of its interest


Employment in detail

OK, so, regular readers will know I’ve been looking for a pop in unemployment for three months. We finally saw it in full time jobs, down 40k on the month (with a margin for error grain of salt) but it was offset by a jump in part times. Even so, For some reason, this was


Politico housing complex foams at the mouth

I think it’s fair to say that with us entering the third day following the rate cut, the banks will not be passing the full easing on. That has sent the politico housing complex berserk. Following is a list of the commentary: Ian Verrender says the banks are greedy Matthew Drummond and Jonathon Shapiro say


Two speeds out the wazoo

Here’s a couple more charts from the National Accounts. The two speeds of Australian states are starting to become pretty crazy. Victoria and SA are in recession. NSW is growing at 0.5%. Meanwhile, WA grew at 8.4% at QLD at 3.5%. That is, for the quarter.


Deficit dependent

Find above the master chart for general government finances released yesterday by the ABS. I’ve a few observations. Yesterday the press was filled with gloomy forecasts for today’s national accounts figures on the basis that government spending contracted more than anticipated in the September forecast. And yes, as you can see, there is a minuscule dip


China’s capital flight

Exclusively from Michael Pettis’ newsletter: On Wednesday night, after the Chinese markets closed, the People’s Bank of China announced that it had cut the minimum reserve requirement by 50 basis points to 21% for the large banks, and lower for the smaller banks.  With the announcement coming just hours before announcements by the Fed, the ECB


Banks on rate effects

Following are some bank economist’s takes on the RBA’s decision to cut today. They are all quite subdued. First, Macquarie Bank sees a limited effect on consumer disleveraging: The Reserve Bank of Australia (RBA) decided to cut interest rates by 25bps at its December Board meeting.  While markets were almost fully priced for a rate


RBA cuts

So, I got one wrong, sort of, given my real prediction was to sit this one out. No surprise really and I should have know better, the Pascometer was glowing red on holding. The Board has decided to cut: Statement by Glenn Stevens, Governor: Monetary Policy Decision At its meeting today, the Board decided to


Has the global business cycle ended?

So, global PMIs for November have passed. Where do they suggest that the global economy is heading? Let’s begin with the good news, the US of A. The combined ISM Manufacturing and Services Indexes are below: The headline figure for manufacturing lifted modestly and it contracted modestly for services. New orders improved for both but so too


Brazil’s huge hopes sinking?

Reuters reports this facinating tale this morning from Brazil: The world’s largest iron ore carrier is disabled and could sink at a key Brazilian port from where Vale, the world’s No.2 mining company, loads about 10 per cent of the global iron-ore trade, shipping agents and media said on Monday. The crippled Vale Beijing is


The RBA gets hawkish on asset prices

A year or so ago, following Glenn Stevens’s historic appearance before the Parliament, I described the RBA as the “Six Million Dollar Central Bank” capable of rebuilding itself. We should recount some of what Glenn Stevens said (with my titles): Gone is the Pitchford Thesis and the free and easy love of private sector debt:


Boom boom retires

Well, well, big changes at the RBA. From the SMH: Treasurer Wayne Swan has made two new appointments to the Reserve Bank of Australia board. Philip Lowe has been appointed as the bank’s deputy governor, replacing Rick Battellino, who is retiring. Australian Industry Group chief executive Heather Ridout has been appointed as a board member,


ANZ job ads stabilise

ANZ job ads is out today and is unchanged from October. It appears this level of ads is equivalent to a slowly rising unemployment rate. For interests sake, I’ve included at the end a second report from Westpac on some of the peculiarities of the ANZ series. Here are the ANZ highlights: The number of


Rates to hold

I’ve had no problem forecasting rates throughout this year despite the consensus being strongly against me. But today, as I consider tomorrow’s call, I’m torn. Let’s start by taking a look at what the RBA said last about its settings: The Minutes of the last meeting stated: Members considered the significance of the inflation data


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


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


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


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


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


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


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


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


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


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


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


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


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


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”


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