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July 26 links: Contagion returns

Up: ore, gold (red and yellow metal!) Flat: Aussie, $US  Down: euro, energy , metals , CRB, grains Contagion returns! Greece 2 Year 5 Year 10 Year Portugal 2 Year 5 Year 10 Year Ireland 2 Year 5 Year 10 Year Spain 2 Year 5 Year 10 Year Italy 2 Year 5 Year 10 Year Belgium 2 Year 5 Year 10 Year France 2 Year 5 Year

Latest posts

8

Brokers turn bullish on banks

The banks are nearing levels where they might be a buy accrding to a report by Credit Suisse. It raises an interesting question. CS is not particularly bullish on bank earnings, but believes the sell off has been overdone. That means that it is not rating the risk potential (of a severe housing correction) which, while it

18

Access goes all in on rate rises

Boy, do we have a market in interest rates. From Bloomberg: Australia’s central bank will increase interest rates three times in the coming year as a mining boom boosts wages and helps the economy recover from natural disasters, a Deloitte Access Economics report showed. High resource prices and strong demand will boost Australian incomes and there

1

Trading Day: US unravels

With the US theatrics over debt ceilings continue into the opening of the Asian markets this morning, the S&P/ASX 200 slumped almost 1% and is now 42 points or 0.93% lower at 4560 points. Other Asian markets are experiencing similar losses, with the Nikkei 225 down 0.6% to 10068 points, and the Hang Seng also

24

Uncle Sam’s self sabotage

I like to think of myself first and foremost as a behavioural economist – someone who tries to understand how our “humanness” impacts on our economic decisions and intereacts to create the economy in which we live. So I’m always thinking not as people as rational actors but as emotional beings who have biases and aversions

5

Producer prices ease, but…

JUNE KEY POINTS FINAL (STAGE 3) COMMODITIES increased by 0.8% in the June quarter 2011. mainly due to rises in the prices received for building construction (+1.2%), petroleum refining (+10.3%) and other agriculture (+7.9%). partly offset by falls in the prices received for industrial machinery and equipment manufacturing (-2.0%). increased by 3.4% through the year

27

Australian stagflation

Late last week, the venerable Melbourne Institute released its Monthly Bulletin of Economic Trends. In it, the economists of the institute predicted that Australia is headed back to the seventies with a bullet: Policy dilemmas ahead … In contrast to other forecasters, we have cautioned for some months now that GDP growth is likely to be

61

Don’t mention the savings

Two senior Australian business and economics commentators today make throwaway arguments about the struggles of the retail sector. First, it’s Alan Kohler, who dedicates his column to explaining how retail is suffering from Dutch disease. His argument is as follows: Retailing is the bedrock of the economy, employing about 1.3 million people directly and touching

38

Peak everything

Below find Jeremy Grantham’s latest quarterly newsletter. In it he draws out his thesis that the world stands at the edge of peak everything. Here is his executive summary on likely outcomes: Summary We humans have the brains and the means to reach real planetary sustainability. The problem is with us and our focus on

16

Rents going nowhere fast

Last week, in The boys who cried rents, I showed how the private sector housing data providers’ perennial bullish predictions of strong rental growth across Australia’s capital city housing markets is at odds with recent data, which has shown sluggish rental growth nationally since early 2009 (see below RP Data chart). Chief amongst the forecasters

9

Repossessions rising

In the last Financial Stability Review, the RBA had this to say about the rate of housing repossessions  in Australia: Rates of mortgagees’ applications for property possession generally declined in the second half of 2010; for the year as a whole, these rates were below those seen in recent years. The exception was south-east Queensland (comparable

11

Chart of the Day: Apple

To start the new week off, here are two charts that sum up some of Apple Inc (AAPL) dominance, from Zero Hedge. First, the amount of cash Apple has built up, paid taxes on and is now is sitting on, with no debt, compared to others in the S&P500 And Apple’s product margins (and the

7

July 25 links: Auction surge!

FDR 1936 . Jesse Cafe Americain Q2 US growth. Calculated Risk Week ahead for Dow. Calculated Risk US inflation easing. Carpe Diem On Fed asset purchases. Econbrowser Madly in love with rationality. Andrew Gelman Iran and China price in barter. Zero Hedge Good company for the miners. Signs of life in Sydney property market. SMH Auction

18

The debt ceiling farce continues

Just as I suspected, the nonsensical debate over the US debt ceiling looks like going down to the wire. From the New York Times today: WASHINGTON — Negotiations over a broad deficit reduction plan collapsed in acrimony on Friday after Speaker John A. Boehner suddenly broke off talks with President Obama, raising the risk of

17

Sane meets insane

It did not get a lot of attention (other than H&H), but there were two very significant plays by our bigger mining companies last week. Fortescue Metals announced it would be looking at raising Dim Sum bonds, i.e. debt denominated in yuan, and would sell in yuan. This would remove currency risk and reduce transactional costs.

4

Australian Dollar Weekly Wrap

Interesting week for the Aussie – finally breaking out through the top of the last couple of month’s range on the back of hopes for a European resolution as we discussed in yesterday’s piece. The outlook could be turning quite positive for the Aussie if we end up with a benign market environement like the

9

Chart of the Week

As you read this I’ll be moving house, upgrading from 2nd class rental scum to 1st class mortgage slave, whilst battling the flu and unskilled Queensland drivers meandering down the Bruce Highway. This weekly post will actually contain several charts, and to start with, a curious observation of GDP per capita correlated to a belief

3

Weekend Links: Norway Terror

Flat: Aussie Up: ore, $US , energy , metals, gold , CRB, grains Down: euro EFSF kicks the can, looks like Spain and Italy are next in line for “shock testing” Greece 2 Year 5 Year 10 Year Portugal 2 Year 5 Year 10 Year Ireland 2 Year 5 Year 10 Year Spain 2 Year 5 Year 10

26

Residex responds (Updated)

Yesterday I posted on what seemed to be a very large turn around in sentiment from John Edwards the CEO of Residex. I also noted that there were some discrepancies between his claimed length of tenure in two of his own articles, and I also thought Mr Edwards was doing a bit of his own jawboning

1

Next Week: CPI rising

With another week of debt crises passing, what’s coming up next week in terms of data, announcements and the like? Locally, everyone will be watching the ABS CPI (nee inflation) release on Wednesday, and overseas, all eyes on another round of earnings results for US companies, GDP and Chicago PMI. A busy week for data.

0

CPI preview

NAB has produced a rather useful guide to next week’s CPI read, which all seem to think will be crucial in determining the August interest rate outcome. Personally, I think there’s little chance of a hike, not least because three days later, when it releases its quarterly Statement on Monetary Policy, the bank is most likely

25

A new bullhawkian argument

Today’s bullhawkian charge cannot go without a prod. According to Chris Joye writing in Smart Company: There is mounting evidence to suggest that Australia’s housing market rests at a critical juncture…In my opinion, the near-term destiny of Australia’s housing market very much depends on next week’s second-quarter inflation numbers. If inflation is low, the RBA

3

Trading Day: 22nd July

The S&P/ASX 200 jumped higher this morning and is now 38 points or 0.84% higher at 4594 points. Other Asian markets are up higher, with the Nikkei 225 up 0.9% to 10095 points, and the Hang Seng up strongly 1.35% at 22255 points. Other risk assets are mixed, with the AUD up strongly at 1.0825

8

Australian dollar breakout

After trading the inside range for a while now the Aussie has finally broken topside overnight on the back of the Euro “solution” and along with the ebullience in other markets is threatening to move up and test resistance at 1.1013. As you can see in this chart the Aussie does not have a life

9

George Marshall turns in his grave

Unless you have been living under an economic rock you have probably heard by now that the Euro-elite is once again trying to convince the economic world that they have got a solution to the Greece driven debt crisis in Europe. A leaked draft statement from the summit can be found here. The Guardian UK