The two faces of housing data

RPData’s latest newsletter highlights that the housing market is falling unevenly, with the top of the market taking a bigger hit than the rest of the market at this stage. With the premium market underperforming, many of the higher priced capital city regions have recorded a significant decline in median house prices since they peaked

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Equity Spotlight: JB Hi-Fi

Following on from Q Continuum’s post on investing during sideways markets, today we shine the light on Australia’s best retail stock, JB Hi-Fi (JBH). Interestingly, this position is not shared with the current marketplace, as JBH remains the No.1 stock to sell short (i.e to profit on a fall in price), with over 14% of


Trading Day: Friday 17th June

The S&P/ASX 200 rebounded on the open from positive leads from the US overnight, but has since reversed back below 4500 points just after midday. The index is up 7 points or 0.17% to 4486. Asian markets are similarly effected, with the Nikkei down slightly, the Hang Seng down 0.18% and Singapore 0.14%. Other risk


This is still not risk off…

I hold a strong view that the instability that we have been seeing over the past few months has in many markets pushed longer term speculative capital to the sides and left the markets to trade on the whim of the short term guys and market news. How else can you explain the lack of


Four dark clouds

The Dow went up a bit last night. Hooray! But if you think this correction is over, think again. This is the correction we have to have. Think about it. There are four big economies in the world: Japan, EU, China and the US. A dark cloud hangs over each. Japan is far worse than


Private banking my butt

Last night, the Basel Committee on Banking Supervision circulated a draft document on what level of additional capital requirement Systemically Important Financial Institutions (SIFIs) will be required to hold. According to Bloomberg, it said it: would subject banks to a sliding scale depending on their size and links to other lenders, said the people, who


A Ford ability crisis

Henry Ford was born on the outskirts of Rockhampton in 1922. In 1925, he established Ford Australia, and subsequently travelled back in time to found the Ford Motor Company in the USA sometime prior. The upshot of all this, is that the bogan knows there is no car company more Australian than Ford, because Holden


Insurance insurance

Insurance stocks have been taking a bit of hammering for obvious reasons. QBE issued a couple of days ago an after market profit warning and is trading well below where it was a year ago. IAG has performed a little better, but not well. Southern Cross has a buy on Suncorp, arguing that it is


Yesterday’s hero

Will they never learn? Nearly 11 years on since it was first introduced the federal grant for first home owners still stands at $7000, even though the average house price has more than doubled in that time. That’s led one leading mortgage broker to suggest it is time the scheme was upgraded. The residential housing market


June 17 links: Up and down

Rocket: $US Flat: gold, ore, metals, energy, Down: euro, Aussie, CRB Smashed: grains Sovereign contagion: Ireland, Portugal, Spain, Italy, Belgium, Greece Philly Fed crashes. Calculated Risk Housing starts, jobless slightly improve. Zero Hedge Royal wedding effect passes. Alphaville Banks using secured funding. Alphaville India tightening. FT Libyan oil gone for years. FT Papandreou wrestles with new cabinet. FT No more stimulus. Tim Duy Citi trashes coal lobby carbon report.


Central banker makes housing sense!

I was disappointed in RBA Governor, Glenn Stevens, speech Wednesday. I had expected that Mr Stevens would at least acknowledge Australia’s Achilles heel – its high level of household indebtedness and house prices – and warn of the significant risks that these pose to the economy. Instead, Mr Stevens ignored the debt Godzilla and linked Australia’s house price appreciation to population growth. Interestingly,


Dutch Disease and jobs

Today the ABS released its quarterly Labour Force Survey – Detailed for May. I’ve broken it up into a series of sectoral charts by full time jobs below. Each says it ends in March but it don’t. Each ends in May, damnit. First up, let’s look at the growing sectors. Top of the pops is,


Trading Day: game over

The S&P/ASX 200 opened down sharply reacting in line with overnight markets which were all down 1 to 1.5%, reversing yesterday’s gains. At just after midday, the index has lost just over 60 points or 1.31% down to 4510. Asian markets are similarly effected, with the Nikkei down 1.1%, the Hang Seng down 1.4% and


Car sales crash

Governor Glenn may still be feeling feisty about the economy but it’s becoming increasingly obvious that he’s flying solo. ABS May car sales are out and can only be described as a crash, down 7.6% month on month and 14.5% year on year. These sales levels were first seen in 2003 and again in December


Wolf debates Stevens

Today Martin Wolf of the FT joins the growing ranks of China skeptics. It is interesting to contrast his views with those of Glenn Stevens, enunciated in his speech yesterday. According to Wolf: Until 1990, Japan was the most successful large economy in the world. Almost nobody predicted what would happen to it in the succeeding


Bye, bye Macfarlane years

Over the past several years, the RBA, and some of its former staff, have engaged in a quiet reassessment of their role in the pre-GFC build-up of destabilising levels of debt in the Australian economy. There are a number of examples. There is the late 2009 confession by Ian Macfarlane’s former deputy, Stephen Grenville, that


The problem with asset allocation

What is asset allocation and why discuss it? Surely super is all about putting money away for retirement: how hard can that be? In this post, I will outline the conventional thinking regarding asset allocation and why it’s mostly wrong. The empirical evidence regarding this contention is overwhelming and stark. The major academic theories that


Shorting houses

Australia’s greatest housing champion, Chris Joye, is back with a new product for housing investment: Tired of the drudgery of finding, buying and managing an investment property? If the Australian Stock Exchange’s plans come to fruition, you will soon be able to get exposure to Australia’s $3.5 trillion residential real-estate asset-class without buying a home, paying


June 16 links: Trojan markets

Rocket: $US Up: gold, ore Subterranean: euro, Aussie, energy, CRB, metals Sovereign contagion: Ireland, Portugal, Spain, Italy, Belgium, Greece Greece burning. Bloomberg, FT Betting on a Greek accident. FT No QE3. Hilsenrath QE3 will be unlimited. Credit Writedowns US core inflation rises. Calculated Risk US capacity utilisation stalled. Calculated Risk Zombie consumers. Stephen Roach Interbank measures seizing. Zero Hedge Rosenberg calls new recession. Forbes US not yet


The debt that killed the UK economy

Back in April, Dr Oliver Marc Hartwich from the Centre for Independent Studies wrote an article in Fairfax on the worrying parallels between the UK and Australian economies and housing markets. The current mood in Australia triggers eerie memories for me. I feel as if I have experienced this scenario before – not in Australia


Stevens raises his fists

Governor of the Reserve Bank, Glenn Stevens, delivered a fascinating speech this afternoon. One would almost have to describe it as combative. He dismisses weakness in the services economy, wholeheartedly defends the mining boom as pretty much bailing us out (which I agree with)  and more or less tells you to get over any concern you


Trading Day: jitters continue

The S&P/ASX 200 opened slightly down, reacting strangely to overnight markets which were all up 1 to 1.5%, and at mid-afternoon has lost just over 24 points or 0.5% to 4561 probably in response to Glenn Stevens inflation rhetoric about future rate rises. Asian markets are mixed, with the Nikkei down 0.13%, the Hang Seng


Melbourne builds on

ABS March quarter dwelling commencements are out and show an onging decline in housing commencements, which is still a give back following last year’s FHOG. For apartments, however, there’s a big seasonally adjusted jump:         MARCH KEY POINTS           DWELLING UNITS COMMENCED The trend estimate for the total number of dwelling units commenced fell 1.9% in


Marginal bet

An intriguing comparison between economic growth potential and valuation of stocks comes from Deutsche Bank this morning. When looking to invest globally, it is a good idea to track economic growth potential, right? And that means looking hard at emerging markets, doesn’t it? Well, not necessarily. The overall growth of the economy does not necessarily


Dour mood sweeps consumers

The Westpac/Melbourne Institute Consumer Confidence Survey is out and makes dour reading. Sentiment fell by 2.6% in June from 103.9 in May to 101.2 in June. The commentary is equally gloomy: This is a soft result. It is the lowest print for the Index since June 2009 (100.1). At that time households were relieved that Australia appeared


FHOG bust redux

Back in mid 2010 when I wrote for Business Spectator, I compiled a column on the turning point in Australian housing and the likely shape of the coming bust: This column concludes that the RBA has busted the first home-buyer bailout bubble, as it should. Now, we will see just how strong supply and demand


Investing in a sideways market

There is always media chatter about what markets are going to do in the short to medium term.  It’s most intense at the end of each year, as the financial pundits stare into their crystal balls and attempt to divine the direction of the All Ords, FTSE, Nasdaq, S&P 500, Nikkei and every other major


Gassy mines (and reports)

When we talk about methane emissions, we tend to think about farting (or burping, more accurately) cows. But another strong contributor to methane emissions (yes, odourless and colourless like CO2) are fugitive emissions from extraction of fossil fuels, particularly coal mines. Every tonne of methane released is the equivalent of 21 tonnes of CO2 released,


Queensland whacks home buyers

3 Months ago the Queensland Treasurer Andrew Fraser had this to say about stamp duty on residential dwellings. One of Queensland’s most despised taxes could be axed to save homebuyers tens of thousands of dollars. Homebuyers have paid more than $12 billion in stamp duty since 2006 but the State Government yesterday said it should be dumped.