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The media’s “Fail” mark on Wisconsin

A huge political drama is playing out in the state of Wisconsin, where 70,000 protesters filled the streets on Saturday to oppose Governor Scott Walker’s plan to end collective bargaining rights for public employees. A day earlier, Republicans in the lower house had voted to virtually eliminate the right to collective bargaining. Meanwhile, the 14

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China and the Aussie dollar

You have to love FX markets, well at least I do. They always keep you honest both in intellectual terms and also on your profit and loss account. Just when you think the AUD is going to go down support holds and it bounces a cent or so. That’s what we’ve seen so far this

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A new “flation”

The sudden rise of the oil price has thrown a cat amongst the monetary pidgeons. Very respectable and noteworthy watchers of the global economy are at complete loggerheads about where we now are in the business cycle. The various “flations” – in, re, de, dis – are being bandied about but nobody, so far as

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Let’s call it a “super profits” tax

Just how incompetent was the Rudd/Swan team in the last term? Over the weekend, and in the week prior, the following captains of industry and senior officials advocated a sovereign wealth fund to help the Australian economy fend off the effects of Dutch Disease: Glenn Stevens, Governor of the Reserve Bank Roger Corbett, Chairman, Fairfax

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Links February 28: Monetary confusion

Keep your hand s off the trigger. Ambrose Evans-Pritchard Pull the trigger. Doug Noland Oil and central banks. Naked Capitalism It’s all a bloody big bubble, says McKibbin. The Oz Party running hard to stay ahead of democracy. Bloomberg QEIII watch. BLS Friday. Calculated Risk The ten biggest system risk banks. VOX AIG muni bond portfolio pressuring

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America’s inequality

Sachs Says Democrats, GOP Both `Unrealistic’ on Budget Uploaded by Bloomberg. – News videos from around the world. Earlier this month, Columbia University Professor, Jeffrey Sachs, launched a stinging attack on the state of economic and social policy in the United States. Sachs is particularly angry that the Government is cutting core Government services at

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China’s unasked questions

An awful lot of rubbish is written about China. Such as how China’s property market is overheating, or its exports unbalancing the world economy. So here are a few questions. When did private property ownership start in China? About a decade ago. Who owns most of the land? The Party (which of course gives them

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Why housing incentives must go

As debate continues to rage about the rising US public debt, it is becoming increasingly obvious that politicians are going to have to tackle some sacred cows if they are serious about cutting the deficit. These include areas that have traditionally been immune from cuts, such as defense, social security and Medicare. These three alone

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Weekly Market Analysis: blinkers or whips?

Weekly Summary The ASX200 finished the week at 4836 points, down 100 points or 2%. Total move for the month (still have Monday to go) is 1.74%. As I thought would happen in last weekend’s analysis, a small correction occurred, ostensibly because of the Libyan crisis and the Christchurch earthquake, but most likely because of

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Guest post: Derivatives regulation – part I

By Satyajit Das. On 30 July 1998, Alan Greenspan, then Chairman of the Federal Reserve argued that: “Regulation of derivatives transactions that are privately negotiated by professionals is unnecessary.” In October 2008, the now former Chairman grudgingly acknowledged that he was “partially” wrong to oppose regulation of credit default swaps (“CDS”). “Credit default swaps, I think, have

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Weekend Reading: Old men talk, young men die

UN blathers about Libya. FT Crackdown grows. BBC Civil war looms. FT Options for intervention. The Arabist Algeria lifts martial law. Reuters Who hits oil hardest? Beyondbrics US consumer and oil. Zero Hedge High oil = US recession. Alphaville US GDP revised down. Calculated Risk Portgual: wider still. Bloomberg Ireland close behind. Bloomberg Ireland’s election. Bloomberg UK austerity just gets

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Wanna try again Mike ?

In late 2010 Mike Smith was pushing ahead to move ANZ further into northern Asia via an acquisition in South Korea. ANZ Banking Group is continuing to conduct due diligence on Korea Exchange Bank, according to chief executive Mike Smith. “We’re still in the middle of that and it’s very hard for me to say

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Like WOW – like wipeout?

The duopolist retailer Woolworths (WOW) has announced its HY11 results before the market opened this morning. In addition, it announced the acquisition of The Cellarmasters Group for $340M (subject to non-regulatory intervention). Highlights include: Revenue up 4.2% Interim dividend up 7.5% Net Profit after-tax up 6% All good figures, reflecting a strong result in difficult

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The Bogan is Doing it Tough

Australia is Doing it Tough. At least this is what we are led to believe, courtesy of a chorus of political and business leaders who lean on this phrase any time they wish to be seen to understand the traumas that Australians, bogan and non-bogan alike, face on a daily basis. We are constantly told

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Capex blowoff

After a string of poor data, the economic cheerleaders have something genuine to celebrate – capex. The local keystone of the endless economic strength thesis is ongoing high business investment, largely by mining firms, as we supply urbanising China and India with raw materials. The following graph is the ratio of capex to GDP going back

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Links February 25: Oily residue

Libya splinters. WSJ Should we intervene in Libya? The Interpreter Current oil levels will shave .5% off US GDP. Econbrowser $120 oil for a year is 2% of global GDP gone. Gavyn Davies US truck tonnage spikes. Calculated Risk US unemployment claims drop. Calculated Risk Bullard begins QEIII softening. Zero Hedge He should know. BusinessWeek

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Crazy Korean Banking

Yesterday I posted about the silent Korean bank run. Today I note that the issue that never existed is fading away. The turmoil in the savings bank industry seems have stabilized for now, but that hasn’t stopped participants from finger pointing over the cause of the crisis. After the Financial Services Commission announced its decision

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Will Canada’s Housing Market be the Next to Fall?

Canada and Australia have a lot in common. Both economies are commodity exporters. Both countries have experienced similar rates of immigration. Both countries largely dodged the global recession that has recently shocked the developed world. And both are said to have world-beating banking systems, with Canada’s ranked as the strongest and Australia’s ranked third strongest in the world by the World Economic Forum’s

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Clemmed up

  A few weeks ago our regular bank insider Deep T mentioned a few pieces of Australian infrastructure while discussing securitization. Certainly securitization is a process which relies on transferring risk into the hands of the bondholders for it to be an effective and useful financing tool. However, risk transfer does not mean an abrogation of

11

The horror

Forgive this blogger for being a bit slow on the uptake, but it just passed a copy of the AFR as it attempted to leave the office and saw the headline “Mining tax hole tops $100 billion”. $100 billion in a fund would have stabilised our financial system for good. $100 billion wrested from power.

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The folly of fiscal austerity

I have already expressed my view on this blog that it is a mistake to conflate the fiscal issues of the United States with those currently faced by troubled euro zone countries like Greece. Predictably, this has upset some commenters, who insist that unless the US takes urgent action to slash its budget deficit, the

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The end of cheap oil?

The oil price may be about to soar, at the very least the events in the Middle East will have some effect. A Macquarie Equities report notes that worries about oil and gas transition through Egypt has turned into more concrete disruptions of supplies from Libya, which exports one third of the world’s spare capacity. The period of low oil

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US housing still cactus

In the latest Breakfast with Dave,  David Rosenberg makes it very clear that the US housing market has begun another leg down and has a long long way to go before the bottom is found. The Case-Shiller home price index sagged 1% MoM in December with 19 of the 20 cities deflating. This was the fifth decline

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Geopolitical risk: don’t forget China

Investors are nervously watching the situation in Libya unfold this week as fears grow that the unrest could spread to larger neighboring countries like Saudi Arabia, disrupting the supply of oil.  Oil rose above $100 a barrel in New York today, while one investment bank predicted that if Libya and Algeria alone were to halt

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Aussie anxiety

This blogger doesn’t like to crow because he has been around markets long enough to know that the Greek notion of Hubris is alive and well. But we wanted to highlighted a Bloomberg article out this morning which flows from yesterday’s blog and we hope will help readers understand that we are on the right