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Spain out of options

I mentioned back in early July that Spain had a serious political problem brewing because the draft Memorandum of Understanding for the Spanish banking system clearly stated that: Banks and their shareholders will take losses before State aid measures are granted and ensure loss absorption of equity and hybrid capital instruments to the full extent possible.

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Where’s the volume?

By Chris Becker Following on yesterday’s post about the complacency around volatility, as measured by the CBOE Volatility Index or VIX, and further questions around the blogosphere on who’s buying this rally, the next question to ask in this rally is where’s the volume? Normally, I don’t use volume as a technical indicator, but like margin

10

Europe returns to recession

For those who have been following my European post for any length of time you may remember my basic macro theme for Europe is that the enactment of the fiscal compact across the zone will create the following dynamic: Periphery nations weakening, France in the middle, Germany outperforming, but the whole ship slowly sinking. This

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Private versus public infrastructure

Recent media interest in the issue of gold-plating electricity infrastructure signals that it is an important time to take a step back – to take an objective look at the history and known economic issues surrounding infrastructure provision, and particularly the private versus public infrastructure debate. These issues are also relevant for the debate about

0

DWS, Mirabela Nickel, Newcrest, Hills Holding, Downer EDI, JB Hi-Fi, GPT, UGL

By Chris Becker Earnings reports started up again yesterday and are now accelerating with over 100 companies on the All Ords reporting this week. On Monday we had a mixed bag with an ASX8 golden giant reporting, alongside some small and microcaps that we follow at the FARM. DWS Ltd (DWS) a small cap Australian IT company,

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Australia’s sub prime mortgage scandal grows

By Leith van Onselen Claims that Australia’s banking sector is conservative, safe and secure have taken a bath in recent days as evidence has emerged of Australia’s own sub-prime lending scandal. In April, we learned via the Australian newspaper how Australia’s largest banks are being forced to forgive mortgage debts of borrowers granted loans based

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Macro Investor Volume 1, Number 7

Macro Investor Vol 1, No 7. is now available at the website and in PDF. Has a dog Buddha-nature? This is the most serious question of all. If you say yes or no, You lose your own Buddha-nature. The above riddle is the first in the Gateless Gate, a collection of zen koans published in

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Protecting the banks

According to Banking Day: Momentum may be gathering regarding a delay in banking regulation reforms, with a planned inquiry into the financial system by an incoming Coalition government of the means of shepherding through any changes to policies that have already been adopted by the industry regulator, APRA. On Saturday, The Australian newspaper reported talk within the

0

News, Telstra, Tabcorp, BWP Trust

By Chris Becker Earnings continued yesterday and through to today, with four major companies reporting results, News Ltd (NWS), Telstra (TLS),  Tabcorp (TAH) and BWP Trust (BWP). News Ltd (NWS), owner of The Australian and Business Spectator reported a net quarterly loss of $1.55 billion, or 64 cents a share, mainly on writedowns in Australian publishing businesses.

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Lenders say no on dodgy docs

From Banking Day: Lenders are refusing to give borrowers copies of the loan application documents, according to a report in The Australian. It said Bendigo and Adelaide Bank has told borrowers they are not entitled to copies of their applications, while other lenders have told borrowers that such documents have been destroyed. In many cases, the

18

China’s July disappoints

China’s July data dump is in and this an economy going nowhere fast. Year on year Industrial Production came in at 9.2%. That is down from growth of 9.5% in June and a big miss to consensus which saw 9.7%. The Fixed Asset Investment component came in at 20.4% year on year, the same as

27

Unemployment in detail

By Leith van Onselen As reported by the Prince earlier, the Australian Bureau of Statistics (ABS) has released labour force data for the month of July, which reported a slight reduction in the headline unemployment rate to 5,2% from 5.3% in June (originally reported as 5.2% but revised upwards). The economy added 14,000 jobs (+0.1%)

27

Ore breaks lower

The ore price fell again yesterday: And as the chart shows, we are now well clear of the neckline on the head shoulder break, which now looks like upside resistance: For those that don’t think that this pattern is text book then this week’s RBA chart pack may convince: Notice the left hand chart with

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Australia’s sub-prime lending

By Leith van Onselen Back in April, The Australian reported how Australia’s largest banks are being forced to forgive mortgage debts of borrowers granted loans based on falsified or fraudulent information supplied by mortgage brokers: Under the scams, which draw parallels with US sub-prime lending practices, a number of mortgage brokers have been found to

68

Cut rates for a lower dollar

That’s the argument made by many MB commenters and today by Westpac’s Huw Mackay (of Phat Dragon fame)  at the AFR. …the most recent balance of payments data show that gross foreign purchases of Australian assets were 42 per cent debt and 58 per cent equity. Westpac proprietary customer data shows that foreign sovereign purchases

16

Diggers and Dealers downbeat?

Sounds like the annual Diggers and Dealers mining pow wow is a little more downbeat this year. From the AFR comes this quote from Neville Power, CEO of Fortescue: “We have not seen anything like the tight labour supply that was forecast,” he told media following a presentation at the Diggers & Dealers conference in Kalgoorlie.

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Housing finance bounces in June

By Leith van Onselen The Australian Bureau of Statistics (ABS) has just released housing finance data for the month of June, which registered a seasonally-adjusted 1.3% increase in the number of owner-occupied finance commitments over the month. Arguably, the most important figure in the release is the number of owner-occupied housing finance commitments excluding refinancings,

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Is gold-plating of electricity infrastructure an issue?

With today’s sudden media focus on the “gold plating” of electricity infrastructure driving excessive retail price rises, it seems the Federal Labor government has finally woken up and read its own carbon policy blueprint. From the Garnaut Review: There is a pressing need to revisit the state-owned distributors. There is an unfortunate confluence of incentives