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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


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


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.


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


RP Data August Housing Update

By Leith van Onselen Above is the RP Data August housing update, presented by Tim Lawless. As always, it’s worth checking out for the smorgasboard of data on display. Tim’s fairly upbeat this month, noting that the housing market is starting to see various “green shoots”. However, the main negative that could stifle the recovery


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%)


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


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


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


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.


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,


At what price does the RBA intervene in the Australian dollar?

FT Alphaville last night wrote the following: But the strength of the dollar is still a cause for concern, even, it seems, for the RBA. Following Tuesday’s decision to leave the official cash rate on hold at 3.5 per cent, it noted the exchange rate had “remained high, despite the observed decline in the terms of trade and


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


Opposition seeks to boost investment elsewhere

Does the Opposition even understand macro economics? From the AFR today: The federal opposition has signalled it opposes the Reserve Bank of Australia intervening in currency markets to weaken the dollar, preferring to let market forces determine its value. Former RBA board member Warwick McKibbin wrote in yesterday’s Australian Financial Review that the central bank should consider printing


RP Data: Housing recovery “precariously balanced”

By Leith van Onselen Following July’s increase in the RP Data-Rismark home values index, RP Data’s Cameron Kusher has provided sensible commentary arguing that the housing market is “precariously balanced” and that it is probably too early to call a bottom: The results for June and July 2012 have been quite strong with capital city


Markets giving up on rate cuts

The RBA meeting today is a no brainer. No cut: More interesting, markets are now pricing out future cuts at a rapid pace. A few short weeks ago, the Credit Suisse rate cut index was pricing five cuts in the next twelve months. Now it’s down to two: I remain convinced that the next move


Are Chinese profit warnings signalling a bottom?

Recently, Hong Kong-listed companies (many of which are Chinese companies) have issued profit warnings at a record pace.  There is little doubt that many of these companies are facing an environment which, to them, is probably not much different from a hard landing. Although I am not at all optimistic about China’s economy over the medium term (as


Coking coal crunched again

Friday saw a little more downward pressure on the iron ore price but coking coal was smacked for another 5% last week: Newc spot bounced last week adding 3.5% to USD85.65/t, while coking coal continued its decline falling 5.5% to USD182.27/t. Although prices at the premium end of the thermal coal spectrum gained ground, a succession of utility tender


Auction clearance rates: NSW up; VIC down

By Leith van Onselen Auction clearance rates in Australia’s two major markets were mixed over the weekend, with New South Wales’ clearance rate  improving and Victoria’s retracing somewhat on relatively low volumes. In New South Wales, a provisional auction clearance rate of 65% was recorded over the weekend by the REINSW, which is an improvement


Macro Morning – the only way is up

Sentiment swung so violently between Thursday and Friday’s that my head is spinning. What changed was not so much a stronger than expected non-Farm Payrolls in the US which rose 163,000 but rather a raft of press reports reconfiguring thoughts on what ECB President Draghi actually achieved with his brinkmanship over the past week or


Macro Investor this week

Find below the contents page of this week’s Macro Investor report for you to consider a 21 day free trial subscription. Macro Investor Volume 1, No 5 Macro A pivot point for Europe? Markets remain in a state of flux, but who can blame them when political uncertainty in Europe is so apparent? We may have arrived at a