Oversupply of Oversupply

It only took one real estate agent to claim “we have a problem”, now they can’t stop themselves. We noted over the weekend that Western Australian Real estate agents have now decided they can declare their issues too. HOUSE prices in Perth are on a downward trend with sellers reducing asking prices by 6 per

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Enemy mine (updated)

Any regular reader of this blog will know two things for certain. The first is that it is intensely concerned about the effects of Dutch Disease. The second is that it finds Ross Gittins’s smug baby-boomer prattle intensely annoying. So, when you put those two things together, spleen hits the screen. From Gittins today: Our


Links Oct 18: Give me Dutch Disease

Gittins all in for Dutch Disease. Ross Gittins, Alan KohlerParity porn from the Treasurer. SMHI will post on these three later today.ForclosureGate smashes everyone. Megan McardleWeek ahead for the DOW. Calculated RiskSolving Ireland’s pain. Businessweek, FT AlphavilleSun King shadows Obama. FTDot-com over again. Robin BrombyBan these now. FTOPEC and the weak dollar. AFPShark chewing through


BHP to get shafted?

And now for something completely different. As you know, BHP is bidding for Canada’s dominant potash producer, PotashCorp. On Saturday, the only other mooted bidder, Sinochem backed out. So the way is open for the Big Australian. Or is it? This blogger had a spare moment to peruse the Investment Canada Act and its National


One graph to rule them all

Say no more !! ( from the RBA ) Hat tip to traveller. Disclaimer: The content on this blog is the opinion of the author only and should not be taken as investment advice. All site content, including advertisements, shall not be construed as a recommendation, no matter how much it seems to make sense,


Weekend Reading: Currency war, but not here

Currency crisis is now. AlphavilleAnd how. Michael HudsonRoubini agrees. Nouriel RoubiniNow it’s bovine shrinkage. FT Don’t worry, keep eating, little sheep. Barf. Ross Gittins2008 redux complete. Banks smashed. All else up. Bloomberg Bill Gross telegraphing MBS bailout. Zero HedgeBut baby steps on QE2. FT, Calculated RiskPhysical-backed metal ETFs. Be afraid of this. ETFdbQuarterly ore contract


Here comes the oversupply.

As we talked about way back in May, at end of every bubble there comes an admission that the “undersupply” of housing was in fact a debt driven myth that only really existed because there was an oversupply of speculators. As the market collapses these people disappear and all of a sudden there are too


Tasmania joins Qld and WA..

In what has become an almost inevitable conclusion we note that other states are joining Queensland and Western Australia into the pit of despair created by reckless economic delusional stupidity. TASMANIA’S real estate industry is at its lowest ebb since the economic doldrums of the late 1990s, industry veteran Deanne Lamprey believes. Research by The


Fitch as a fiddle

This week’s Fitch report on stress-testing the banks in the event of a housing crash has produced a muted response but one divided equally between consternation and joy. On the one hand, the idea that Australia can escape a 40% house price crash with a simple $15 billion loss, divided between banks and mortgage insurers,


Blame it on the chicks

Jessica Irvine of the SMH takes on the bubble today and, well…lets down her sisters. According to Irvine: The basic argument of bubble theorists is that prices must return to their historic average as compared to incomes. On most measures, house price growth has far outstripped growth in incomes. The crudest way to measure this


Links Oct 14: Ship’n steel

We’re rich. Econompic.And here’s why. EconompicOre spits upward from cup and handle. BloombergRio at capacity. ReutersFortescue not. Steel OrbisPort Headland powering. Steel OrbisFor how long? ReutersUS bank CDS foreclosed. ZeroHedgeMore on ForeclosureGate divergence. Abnormal ReturnsMore ForeclosureGate than you can handle. Barry Ritholz Emerging market bubble. NYT and Henry Thornton (from recently)No bubble. Yes bubble. Yada,


Still building the housing time bomb

The first page of the housing time bomb recipe reads. Ingredients: Unrestrained credit growth Central Bank denial Government incentives Government intervention. False promises; containing 1 parts population, 1 part underlying demand and 1 part undersupply. Method: Allow unrestrained credit to outgrow income by a factor of 6 adding government incentives and central bank denial as



As we mentioned a few days ago about the next stages of the US housing debacle. The loans on these foreclosed properties were on-sold ( in some cases many times ) into the MBS market. Given that the title documentation was not legally complete, then this should never have been allowed to happen. If there


The effects of QEII

Yesterday Karen Maley parroted a newsletter from Hoisington Investment Management that argued that efforts around QEII “…may not prove any more successful than their previous attempts. Even worse, they may prove extremely harmful.” According to Maley, “The authors point out that the most likely outcome is that it fails to boost economic activity: “It should


Bust or flatline?

Two recent stories have this blogger reconfirming its assessment of the bust ahead for Australian housing. It has argued that we are facing not the ultimate Waterloo for the bubble but a replay of 2003, when the first FHBG inspired frenzy ceased. As it has argued before, the dynamics then were similar to now, the


Question to our Australia based readers.

For some reason we are seeing US political campaign ads on our blog today even though we are viewing from Australia. Is anyone else in OZ seeing them? They are actually quite surreal, and an interesting demonstration of the difference in political culture between Australia and the US. Disclaimer: The content on this blog is


Are the chickens getting restless ?

We detect a bit of worry falling over the Australian market place. Yesterday we saw a fair fall in the ASX on the back of not much at all. China did a bit of tightening on its lending, but then the banks in China came out and said they have been pouring out credit anyway.


Wholesale debt WTF

According to Banking Day: Australian banks are operating in an environment where they face an ongoing risk of funding constraints, a leading banker said yesterday. National Australia Bank’s group executive for business banking, Joseph Healy, said big Australian banks were reliant on offshore term debt and were among the largest global debt issuers. Speaking at


New lobby for (non-mining) exporters (updated)

According to the SMH today: The surging Australian dollar ranks as a far bigger influence on profitability than the threat of further interest rate rises, a survey of chief executives says, in a sign of the growing strain the currency is placing on many companies. The Australian Industry Group CEO survey, to be published today,


Links Oct 13: BW2 RIP

The end of BW2. Tim DuyMisplaced faith in the Fed. David RosenbergBan these now. WSJGlobal bank resolution hits a hurdle. FTChina snubs Norway. Pleasant, our new friend. FTThreats to BHP’s Potash bid. Matthew StevensProductivity versus aging. Peter Van OnselenGoldman raises gold target. Sell. Zero HedgeWill Wall St pull a Mac Bank? ForbesOre price ramp established.


It’s all good!

Here’s today’s breathless piece of drivel. From Simon Johanson of the SMH: House prices will continue to grow by up to 20 per cent over the next three years despite interest rates hitting a peak of 9.1 per cent, a respected business forecaster said today. A QBE Housing Outlook 2010-2013 survey compiled by BIS Shrapnel


Houses and holes

This blogger sees economies in three categories. There are pre-modern economies which produce largely commodity output. There are modern economies which produce knowledge and manufacturing output. And there are post-modern economies that produce nothing but huge numbers of transactions around assets and business services (especially the financial variety). Australia used to have a balance of


US Housing Market: From Bad to Diabolical

We all know that the US housing market is in bad shape. Following the onset of the sub-prime turned ‘Global Financial Crisis’ (GFC), US house prices have tanked to be near their long-run trend: Some markets where supply restrictions were present – most notably California, Nevada and Florida – have fallen hardest, whereas those with liberal land


Links Oct 12: More Foreclosuregate

Banks react to Foreclosuregate. Naked Capitalism I, II, IIINot for the faint of heart. Chris Whalen (missed these) I, IIWill it freeze the housing market? BloombergYes, it will. The Whisperer (h/t Unconventional Economist) Suggested solutions. Oh my… Felix Salmon And, bugger me, some mainstream Australian coverage. Adele FergusonSwiss take bank regulation seriously. EconomistBut it’s all


OZ Real estate .. Still floating southward

The ABS released the finance data for housing today. The usual spin doctors are attempting to make the best of it but in reality it isn’t good news, for starters there is this. Total housing finance by value fell by 1.3 per cent in August, seasonally adjusted, to $20.147 billion. However the real damage is