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Gottiboff: Global rate hikes to trash Australian households

From Gottiboff today: Despite a few interruptions, US bond interest rates have been falling since the early 1980s as US bond prices rose, forcing yields lower. That bond boom is over. American interest rates in 2018 are now set to rise sending shockwaves around the world. Here in Australia the US directional change will edge

28

2017 was the second hottest year in recorded history

Yes its getting hotter. From the Washington Post: The year was the second-hottest in recorded history, NASA said, while scientists from the National Oceanic and Atmospheric Administration reported 2017 was the third-warmest they have ever recorded. The two government agencies use different methodologies to calculate global temperatures, but by either standard, the 2017 results make the

70

Tumbling apartment sales begin to bite

Via The Australian: “There is absolutely no question we have seen a considerable softening in the construction end of the residential apartment space,” Martin Monro, the managing director of listed construction company group Watpac, told The Australian yesterday. “The manipulation of interest rates would clearly impact the housing market … if people can’t see a possibility of

21

Applause: Aussie households pass debt-to-income double ton

Be upstanding for the double ton, via UBS: Household debt restated upwards With the release of the National Accounts the Australian Bureau of Statistics (ABS) has been undertaking ‘quality assurance work’ and making a number of revisions to historical estimates. One of the more significant changes was to incorporate new data from APRA for Responsible

79

Stung! Major banks caught ponzifying FHBs

Via News: COMMONWEALTH Bank is encouraging struggling first home buyers to borrow 100 per cent of the value of a property using their parents’ home as security, describing the highly risky strategy as a “great option”. …The LF Economics founder, who described the undercover chat as “cheeky”, said all the banks did the same thing

56

Cancel the Apocalypse: House prices are rising!

Or so says Justin Fabo and Ric Deverell, economists at Macquarie Bank: “It is now looking very likely that housing prices at the national level are again rising modestly,” the pair wrote in a note released this week, adding the disclaimer that “large differences remain between locations and type of housing”. Given the seasonal nature

46

Is Australia’s interest-only mortgage cliff as big as US sub-prime?

Domainfax is worried: Queensland property investor Peter Button “grabbed the profit and ran” when his interest-only loan expired and he realised that refinancing would trigger a hefty increase in repayments. “I saw a refinancing issue coming over the horizon, it was easier to just get rid of it,” said Mr Button who recently sold his

78

Bitcoin crash intensifies

It’s turning nasty for BTC with $10k now history: A note from Capital Economics is uncharacteristically blunt: Claims that cryptocurrencies will replace established fiat currencies are rubbish; our view is that Bitcoin is a bubble. Indeed, the latest price falls suggest that the bubble is bursting – although with prices still ten times higher than

80

Dick Smith attacks Chinese water at the Oz Open

Via Herald Sun: DICK Smith has criticised the Australian Open’s decision to sell bottled water from China, as a local brewery offered to supply water to the tournament in 2019. The Australian business entrepreneur described the move to sell water from overseas at an international tournament which is hosted in Melbourne as “bizarre”. He said

24

Joke cryptocurrency passes $2bn

Via Motherboard: Jackson Palmer is an Australian entrepreneur and technologist best known for creating the infamously successful “joke” cryptocurrency Dogecoin. Currently based out of San Francisco, Jackson works as a product manager but is still active in the cryptocurrency space. Jackson has holdings in various cryptocurrencies, including less than $50 worth of Dogecoin. You can

140

Shall we move Australia Day?

Australia’s great political symbolists, The Fake Greens, are at it again: Putting the case for making changing the date of Australia Day one of the Greens’ top priorities in 2018, Senator Di Natale said the 26th of January represented pain and suffering for First Australians. “It’s a day that represents an act of dispossession, an

90

Pascometer redlines on property crash

Weeoo, weeoo, weeoo. I’ve been pretty sanguine about the unfolding property correction. It’s another round of slow melt for now, plodding lower for years as Macroprudential 2.0 tightens then negative gearing is removed. With fiscal stimulus pouring out and the odd rate cut thrown in it’s manageable until we get another external shock. But that

47

The end of middle management

Cross posted from The Conversation: by Massimo Garbuio, Senior Lecturer, University of Sydney and Nidthida Lin Senior lecturer, University of Newcastle The trend of “flat” organisations is catching on at some of the world’s biggest companies. It’s easy to see the appeal when you think of a utopia where everyone in an organisation has a

13

Credit Suisse: Saving households to force more rate cuts

Via Credit Suisse’s excellent Damien Boey today: The RBA’s optimistic consumption thesis RBA officials are of the view that consumption growth should be quite solid on the back of job creation, a gradual pick up in real wage inflation, and a modest reduction in the household saving rate. To be sure, they see risks stemming

39

CoreLogic: New year brings house price falls everywhere

Via Core Logic, major city house prices continue to sicken with Melbourne joining in so far in January: As the leading mortgage index plunges but listings don’t (talking about year on year changes not the cyclical drops): It will be fascinating to see what the Autumn season brings. My guess is a spreading slow melt.

42

Sunday Night pumps Mr IQ’s leverage empire

Dear God, how about some research Sunday Night? He’s Australia’s most surprising real estate mogul but at 32, Nathan Birch’s success has been achieved by following some very basic investment rules. Meet Australia’s most surprising real estate mogul who has amassed a portfolio of hundreds of properties and now he’s sharing his secrets. Part 1 Since

41

Coalition liars comprehensively shamed on negative gearing

By Leith van Onselen The Coalition’s strident defence of negative gearing, and the lies used to support the policy, is looking increasingly toxic for the Turnbull Government. Last week, the ABC’s FOI release from the Australian Treasury showed that Labor’s policy to restrict negative gearing to new builds and halve the capital gains tax (CGT) discount

48

Why unregulated cryptocurrencies could trigger another GFC

Cross-posted from The Conversation: The price of bitcoin hit $17,000 late last year and – although the cryptocurrency has plunged since then – there are signs that an absence of regulation can hurt investors and trigger the next financial crisis. Despite the laudable blockchain technology and the great opportunities it offers in enabling quicker transactions,

26

Is Perth’s housing market “close to bottoming out”?

By Leith van Onselen From WA Today comes the eternal question about whether Perth’s housing market is about to recover: Australia’s peak housing body predicts Western Australia’s housing market is close to “bottoming out”… “The WA market is approaching a bottoming out point after record highs in 2014,” he said. “Since then it’s fallen back