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Foreign bond deluge

This blogger tracks Australian bank’s foreign liabilities using the ABS’s National Accounts: Financial Accounts. It aggregates the bonds our banks sell to oversees investors. June quarter figures were just released and show that our banks now owe $323.9 billion on bonds with maturities above one year. And another $83.3 billion in bonds with maturities under

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Links Sep 28: Pascoe smackdown

Must read: Pettis does Pascoe. China Financial MarketsWhy the Plaza Accord was not responsible for Japan’s bubble. Models and AgentsWhen will the USS QE2 sail? Calculated RiskIreland and Portugal spreads won’t stop. FTAlphaville Greece looking a bit better. BloombergHope springs eternal. The Dow is going to 38,820 (LOL). BloombergChina trade war. Real Clear MarketsUS dollar

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Who would you short?

Given we received some good feedback to our previous question on hedging we thought we would move on with another one. Again we will leave it posted for a few weeks before collating the answers. We are currently compiling a list of economists and economic commentators who we feel are making Australias and the worlds

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Is Aussie Mac real?

Robert Gottliebsen today takes on government guarantees of Australian banks. It is more than welcome that this topic gets greater public scrutiny. It is nothing short of bizarre that the very foundation upon which Australian banks operate has shifted and yet we carry on as if nothing has changed. Nonetheless, there are a series of

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Currency meltdown

David Uren has a useful piece this morning suggesting the bull market in gold is presaging a global currency crisis. If money is a store of value, printing more of it represents a devaluation. These concerns were further fanned last week by the central banks of England and Japan. Minutes of the Bank of England’s

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(un)luck of the irish

We note once again today that reality has struck back at Europe with economic delusion taking a good punch in the face. The irish economists seemed to have got everything backwards. Perhaps all those good years have got to them; they seriously don’t seem to have a clue what they are doing. Senior Irish cabinet

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Deciphering Treasury’s Red Book

Delusional Economics highlights an important Business Day scoop in which they have gotten their hands on parts of Treasury’s Red Book for the incoming government. It includes the following passages: “A key risk for the Australian economy is our reliance on short-term external debt, largely intermediated through the banking system … Among Australian financial institutions

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It took an FOI…

We are not sure why in a supposed democracy it takes a Freedom of Information request for someone inside the economic establishment to finally admin a problem exists that has been obvious to many people, including us, for a long time. But it seems that it did. Today we note that under duress Australian Treasury

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ABC on the bubble.

As a follow up to the information we posted on CBA last week we note that ABC has a very balanced update on what has been going on. It is nice to see that the media is still capable of giving a balanced appraisal of the situation, and interviewing multiple people to get all sides

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One to add to your favourites

Just a quick post to let our readers know that we just noticed David Llewelyn-Smith ( assuming it is the real one ) has started a blog. It is obviously in its infancy, but given his good work on Business Spectator it could be one to keep your eye on. We noticed in one of

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A plea for a G2

As China and the US shunt their way towards a trade war, I offer this excerpt from The Great Crash of 2008 as a roadmap for economic co-operation between the powers. I co-authored the book with Ross Garnaut but this section was written by the good professor. Sadly, I see little chance of this happening…

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Links Sep 24: Wen flips the bird

Wen: No way, Jose to 20% yuan lift. BloombergWhy the US should have gone Swedish (with the bailout). Barry RitholzUS leading indicators: all about cheap dough. EconompicMr copper still ripping. BloombergIs the US in 1931 or 1921? Baseline Scenario

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Bubbles Macfarlane

This post began as a critique of yesterday’s RBA release of its discussion paper: Asset Prices, Credit Growth, Monetary and Other Policies: An Australian Case Study. The study is in large part an examination of the Macfarlane RBA’s attempts to “lean against the wind” in 2002 and 2003 as an Australian asset bubble emerged. The

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Links Sep 23: Bernanke’s fires up the whirlybird

Gavin Davies notes that the US FED has overturned decades of hard yakka and has now committed itself to making inflation rise. He concludes “…it is not difficult to see why the dollar has been falling, and gold rising”. But Chris Whalen goes bananas on declining profitability in the US banking system and declares ahead

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The CentralBankopian perspective

Given quite a few articles we have been reading over the last few weeks, we have decided it is time for another little visit to CentralBankopia and get another perspective on things.If you are not already aware of CentralBankopia we recommend you firstly read this and this and this Most traditionally educated economists and economic

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Captain Glenn.. Softly Softly

Previously has warned, and then he warned again. Did anyone listen ? Today we note that Dun & Bradstreet report that debt reached yet another record in June, so it looks like noone did. Consumer debt rose to record levels in the June quarter as defaults on commercial leases increased in spite of improving economic

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Clowns can’t say "de"

As we have been saying ever since we started our blog the US has had an asset shock and if history is any measure they will incur a deflation cycle. In yet another repeat of the great circus performer getting things wrong; we talked in this post about a paper we found where the great

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Queensland’s sneaky houses

Back in 2007 Queensland was announced as one of the most undersupplied property markets in Australia where prices and rents were set to surge due to the lack of properties. Since then we note that the population has been growing strongly. A final state government analysis shows Queensland’s growth rate was 2.6 per cent in

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Determined denial

Everyone has seen the ads. A sturdy and commonsense banker confronts a troupe of American advertising hot shots. The banker responds with steady incredulity to their fast and loose attempts to modernise his brand. He is the model of prudence, juxtaposed against faddish spin doctors. In the real world, Commonwealth Bank executives are travelling internationally

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China, Interest Rates and more European Debt

In a follow up to a little post yesterday about China’s iron ore demand we note today that customs data from China matches what we said. China, the world’s biggest iron ore consumer, imported 19.4 million tonnes of iron ore from Australia in August, down 16 per cent from July, customs data showed on Tuesday.

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Hedging.. Not the Garden variety

We thought we would try something a bit different. We are getting approximately a thousand page impression per day at present, so we think we may have reached a large enough audience to start asking a question or two. We will leave this post at the top of template for a while to see how

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Has the dragon discovered a local buffet?

We note today that once again news of the unhungry dragon is leaking out. Again you won’t find this news in mainstream media but the trend is continuing. Spot prices of iron ore slid to their lowest in seven weeks with no signs demand from China, the biggest market for the steelmaking material, will pick

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Up to their eyeballs in it ?

In an interesting merge of a couple of our latest posts we note that Karen Maley has outed the RBA for having vested interests in talking down the Oz housing bubble. According to data from the Australian Tax Office, only 13 per cent of taxpayers are claiming rental income, which represents a slight increase from

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Weekend Links

Just a few links before we enter into another busy weekend. Goldman are still out spruiking their report, this time at Business Spectator. Oz property bulls are now warning about interest rates rises. The HIA are once again calling for government intervention. US consumers are still unhappy with 16% unemployment. Who could have guessed ?

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Stop complaining, you all earn $100K

In the last couple of days the “not-so-mainstream” types that report on the economics of Australia have been reporting on the fact that CBA seems to have “sweetened up” the figures about Australian house price to income ratios in order to make a presentation to an international investors group. Many of the overseas investors have