More clowning about

Firstly thanks to “Traveller” for his efforts in keeping the blog alive while we were on tour in NZ. Now back to business. We note today that world markets had a bit of a flurry on the back of the “the clown’s” words about providing more “help” to the US economy. This always amuses us

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Morgan Stanley on OZ Real Estate

It seems that finally some of the bigger boys have some comments to make about the OZ property market. Gerard Minack from Morgan Stanley has some interesting comments to add to the mix in his “Australia Strategy and Economics” paper from mid August. I have a copy of the paper if anyone is interested (e-mail


Just how bad is housing in the US?

Great, so ED can manage more posts from NZ than I can. Oh well. Last week I read this piece by Robert Gottliebsen which got me thinking about something I read by David Rosenburg on the plight of US housing. “In the U.S.A., we received more news today that the housing crisis is far from


Safe as (straw) houses

Whilst I was on vacation escaping the bitter Melbourne cold, Morgan Stanley Chief Strategist, Gerard Minack, released an excellent research article on the Australian housing market, entitled Living in a Bubble. Mr Minack’s article received widespread coverage in the press (for example, see here and here), so it is likely that many Australian readers are aware of his analysis already. And fellow


A little more from NZ

Almost at the end of our holiday now, just did a quick glimpse of bloomberg to discover that nothing has changed in our absence. All the same stories still hovering around, Europe, Japan , US all tredding water , nothing fixed. We note the “Jackson Hole gathering” of many of the world’s central bankers over


Postcard from across the pond.

Here we are staring at Mt Hutt from our hotel in Methven laughing out loud about the “goings on” back in Oz. The government looks like it may be formed, with the deciding vote being Bob “big hat” Katter from Mt Isa. Personally we think he is a complete lunatic, but you have got to


Election eve thoughts

Well it’s the guest blogger here that ED has unwisely left the keys to this fine blog with. I do feel as though I’ve let him down by not commenting earlier but unlike him I must sleep at least once a day. Still it could be worse – I could be a real economist but


Population Ageing is Bad News for the Housing Market

In Bringing it Home, I argued that demographic factors have played an important role in creating Australia’s housing bubble and that these same factors are likely to contribute to a house price correction in the future: “One of the key drivers of Australia’s strong house price growth has been the Baby Boomer generation’s rampant buying of investment


On Blogging and on Holiday

We are taking a short break from blogging for the next 2 weeks as a holiday across the pond in New Zealand is calling our name. We will try not to think too hard about economics while we are visiting “middle earth” in the south island of NZ. We may have a chance to find


Oz Property Insight…. What’s that noise ?

Today we were sent an e-mail by “Cameron” in response to our latest post on Real Estate in Oz. Cameron has got his hands on the latest property report from Matusik Property Insight. They are a Brisbane based company who claim to be “Real estate strategists specialising in new residential development advice”. Like most property


Austerity … What did they expect ?

As our daily readers would know we are not for or against government deficits as long as the countries are issuing debt in their sovereign currency. We do this because we try not to focus on the “money” aspect of macro-economics. The real currency of governments is GPEC. Money is simply a tool used to


Now where did all those houses come from ?

Firstly, it seems the US has once again woken to reality, there never was a recovery because noone has fixed anything. We will leave it to others to analyse the fallout because we are playing catchup due to the timezones. But once again we see economists running to “adjust” their delusionally optimistic predictions. Now for


Pic of the week explained.

Sorry to a couple of readers who we confused with the blurry pic of the week. We meant to get back to comment on it but ran out of time. It is a graph from data captured by the RBA on the massive growth in “off-balance sheet business” of the Austrlian banks. The spreadsheet is


Oz RE spruiking king switches teams ?

A couple of weeks ago we mentioned that a well known spruiker stated he had given up on housing price growth. It now seems that after years of telling people that houses were , well “as safe as houses”, and producing hundreds of internet posts and media releases as to why “Australia is different”, he


OZ Real estate .. The life rafts are out.

Another busy day, so much to say but not enough time. Can only spare a few late night moments to mention that it is becoming more and more obvious that the Australian real estate market has floated into correction territory, just like we warned it would. The number of home loans taken out by owner-occupiers


Sunday Musings

Just a short post ( it is Sunday ) to let our readers know about two interesting reads we became aware of over the weekend. Firstly a recent article by Michael Hudson. Australia has the means to protect its growth and to keep more of its income at home. But if it is to remain


More news on Canada RE

At the being of July we mentioned how the Canadian housing market was showing some similar disfunction to the Australian market. Today we note that the similarities remain. The malaise in Canada’s housing market is deepening, as record-low interest rates and a vast selection of homes prove to be insufficient incentives to draw new buyers


Again we ask, where is the US recovery.

Once again, in response to the clown reality delivers another story. More Americans than projected filed applications for unemployment insurance last week, indicating employers kept cutting staff as the recovery showed signs of slowing. Initial jobless claims climbed by 19,000 to 479,000 in the week ended July 31, the most since April and exceeding the


AFG.. Still scaring the pants of us.

We have talked about AFG before. They claim to be Australia’s largest mortgage broker. Their latest report on mortgage issuance just plain scares the pants of us. We are well aware we are bearish on Australian property , but seriously some of these statistics have got to worry even the most bullish of spruikers. Firstly


Where to for commodities futures ?

Yesterday we saw Australia post a record trade surplus for the June Qtr on the back of a commodities export boom. This is very good news for certain sectors of the Australian economy and amusingly a “suprise” to economists. We are not sure how an extra $1.5 billion in 3 months can slip by an


Stressing Chinese Real Estate

We note this morning that the Chinese government is said to be asking banks to see how they would cope if their property portfolio lost 50% to 60% of their value. The unrecoverable debts in the Chinese banking system is something we have spoken about before. China’s banking regulator told lenders last month to conduct


More Oz problems … that was quick

Just 2 hours ago we were discussing what we thought we would see in the short term future for the Australian economy. We also expect to see further contractions in debt and spending as once this gets up to speed it tends to start feeding on itself. If you are a daily reader you will