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NSW moves to stimulate housing

The Reserve Bank may be happy to watch housing burn but right on cue government intervenes to ensure the dream lives on. The chosen weapon? Grants! From the AFR: The centrepiece of the O’Farrell government’s budget, delivered on Tuesday, is a package to encourage new housing developments, including a $5000 “New Home Grant” for all non-first

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NAB survey tanks in May

The May NAB Business Survey is out and is not pretty. The headline business conditions number fell to -4, which is well below the bullhawk inspired lows of last year: And business confidence dropped to -6, still well above the bullhawkian low of last year, thanks no doubt to rate cuts: The internals of the

26

Not different, lucky

There’s still plenty of soul searching going on amongst economists and economic commentators today about last week’s strong Australian macro economic data. Ross Gittins spends some time agonising over economic strength before suggesting we all throw in the towel. Given Gittins’ wholeheartedly abandoned his line that we were in a boom after the previous quarter’s

1

Housing finance flat in April

ABS Housing Finance is out and is going nowhere. The headline number was a seasonally adjusted rise of 0.2%: The internals show decent bounces in the value for owner occupied and investment loans: But for those looking to find turning points for established dwellings, you can see in the loan numbers that the growth was

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Are we a banana republic?

From the AFR this morning comes an allegation from the boss of Glencore that Australia’s sovereign risk profile has deteriorated: “We have spent a long time on roadshows [with investors] and one of the biggest questions on the roadshows was: ‘Glencore you are in difficult, risky countries. You’ve got a vast amount of assets in

8

Australian dollar rally and reversal

Ben Bernanke stole the punch bowl for commodities and commodity currencies last night, which had rallied on the back of the Chniese rate cut and freeing up of deposit and lending rate controls. But with his usual equanimity, the Fed Chairman simply didn’t want to play ball and add more stimulus and markets were not happy

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Employment in detail

By Leith van Onselen As reported by Houses and Holes earlier today, the Australian Bureau of Statistics (ABS) today released labour force data for the month of May, which revealed more strong jobs growth. In seasonally adjusted terms, total employment increased 38,900 (0.3%) to 11,537,900. Full-time employment increased 46,100 (0.6%) to 8,107,900 and part-time employment

0

A psychological slowdown

Find below another interesting note from the ANZ commodities team about a recent trip to China. It has some good texture and decent analysis around short term developments around stimulus, even if it fails to address the now widely accepted conundrum that China faces vis-a-vis the shelf life of its fixed asset investment model. ANZ

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GDP’s soft underbelly

By Leith van Onselen Mark the Graph and Stephen Koukoulas yesterday provided some great insights into the main reason why Australia’s March quarter GDP print of 1.3% growth was so strong: because inflation, as measured by the GDP Implicit Price Deflator, fell sharply over the quarter. To highlight the effect of the Implicit Price Deflator

5

A weather change in China

Courtesy of Also Spracht Analyst. Yesterday I talked about the pick-up in lending in the final week of May in the big four Chinese banks, which is a usual occurrence in China. Today, we are hearing the numbers for all banks and the number is much higher than expectations. Sina is reporting that new loans from all

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GDP explodes

Well, how about that! National Accounts for the March quarter are out and BOOM! A quarter on quarter increase of 1.3%. An annual increase of 4.3%. Now, the annual increase does overstate things to an extent, given it contains the rebound quarter from last year’s floods. But even so, if you cut a half point

14

Bill Evans: more cuts to come

Australia’s best bank economist dissects the Statement and sees plenty more cuts in the pipeline. I agree. As expected by Westpac the Reserve Bank Board lowered the cash rate by 25bps to 3.5%. Relative to the statement in May there has been a series of observations around the world economy and the domestic economy that

1

Bets are off in Macau

On top of the already poor macro data from China that everyone watches, alternative indirect gauges of the Chinese economy, like electricity output, are clearly showing that the Chinese economy is close to hard landing, if not already in one. I have previously mentioned another indirect gauge: Macau gaming revenue.  The latest data shows that Macau

26

Trading Week

So where have the markets gone this week? Past the daily noise and headlines, this weekly chart heavy post will examine the major markets (debt, commodities and currencies) with the Australian investor in mind. T’was a wild night on risk markets last night, with a disappointing set of macro data coming out, which validated Houses

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In praise of equity

The stock market fate of Facebook has focused attention on the state of the public equity markets. Already, the company is being sued for allegedly misleading investors about the state of its business. There is much hand wringing about the problems of being publicly listed — the onerous burden of regulation, the public scrutiny, the

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Melbourne property falls sharply in May

By Leith van Onselen RP Data-Rismark this morning released its daily home values index for 31 May, enabling us to calculate house price performance across Australia’s major capitals over the month. According to RP Data-Rismark, Australian capital city home values fell by -1.41% over the month, led by Melbourne, where prices crashed -2.66%, which is

3

DJ’s offers hope

DJ’s released its Q312 trading update this morning and said the following: 3Q12 Total Sales of $399.8 million – down 2.9% on 3Q11 3Q12 LFL Sales declined by 3.1% versus 3Q11 Rate of sales decline stabilised and is tracking broadly in line with 2Q12 The Company has made good progress in clearing excess inventory Best

1

China can kick the can

Exclusively from Michael Pettis’ newsletter. China, meanwhile, is also suffering from a lack of confidence although I think we are still in early enough stages that we remain on the right side of the credibility curve.  But perceptions have certainly changed a lot in the last few months. As recently as three years ago there

10

All eyes turn to Spain

The news from Europe was all Spanish overnight as the country continues to struggle to find traction on any plan that will lead it away from the need for external help: Spain backtracked on a plan to use government debt instead of cash to bail out Bankia, as Prime Minister Mariano Rajoy struggles to shore up the