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2008 redux (updated)

I won’t make a habit of posting on weekends but this is important. Grain markets are dislocating upwards. Oil has surged 14% in two weeks. The Aussie is threatening parity. Gold is rocketing to new highs. Everyone is on one side of the emerging markets trade. The Dow is powering on easy money. BHP is

Latest posts

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Weekend reading: Black Swan 2.0

Foreclosuregate: What is it? Zero HedgeThe banks’ immediate problem. Karl DennigerThe bigger problem. Chris WhalenAnd how it will freeze markets. Felix SalmonThe MERS monster. FT AlphavilleThe effect on home sales. NYTThe pain and the progress. Janet Tavakoli Other stuffAlcoa earnings bullish for commodities. Money GameShocking US employment report. Calculated RiskSoros does China. George SorosMapping the

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Ric goes bear.. Pop Pop Pop.

In a very interesting turn around, RBA deputy Ric “housing bull” Battelino has suddenly decided that housing prices in OZ will be “stagnant” for a while and this is a good final outcome. The Reserve Bank has poured cold water on the hopes of anyone looking to make money out of increasing house prices. In

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Unpleasant scenarios

The blowoff in gold and oil must mean that we are rapidly approaching the zenith of this charming QE2 rally, which has morphed swiftly into outright currency war. Helicopter Ben is now completely boxed in by the stock market which has rightly interpreted his Jackson Hole pledge to print money “if” needed as a rock

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Links Oct 8: Currency chaos

More join the currency war. BloombergWhere the US takes it next. Robert ReichCurrency volumes explode. Reformed BrokerIMF: no mood for accords. BloombergDutch Disease alert. But that’s ok because we’re making “space for those parts that have to grow over the next 12 months or so”. Bloody hell. We need a new tradable goods peak body

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Where did all those people go ?

Today we note that population growth in Australia is taking large revisions downwards. IMMIGRATION numbers are falling fast as overseas students continue to abandon Australia. Australian Bureau of Statistics figures released yesterday showed net immigration for the year ending March 31 was 241,400, 25 per cent lower than the 320,400 recorded for the year ending

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Busy Day.. Only time for some links

Pimco follows everyone else with a vested interest to decide there is no bubble in Oz housing. This is getting so repetitive , We will leave it up to the comments to tell you the truth because we are bored with this moot argument Morgan says the CBA will attempt a “customer bird” soon. IMF

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One chart to rule them all (updated)

After this blog’s recent Housing Velocity post, in which a comparison was made between total housing turnover and population growth, reader Torchwood1979 made the eminently sensible suggestion that we strip dwelling commencements from the figures and see what happens. Well, here it is: Established dwelling sales from 1991 to 2009 in major Australian states. One

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Links Oct 7: Bulls versus bears

Correlation bubble. FT AlphavilleMore like everything pricing for QE2. Zero HedgeADP tank signals QE2 ahead. EconompicGoldman says buy Euro. Sell it. Zero HedgeDow overbought. PragCapWanna be right or make money? Barry RitholzThat definitely looks like a cup and handle on the ore chart. BloombergMatched by another little one on the Baltic Dry.And more. BloombergSwift revaluation

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Admirals of Banks declaring war.

Until recently the only banking Admiral willing to come out with his middle finger in the air at his customers while saluting his shareholders was CBA chief executive Ralph Norris. Today we note, probably to the joy of the RBA, that others have stated they want in on the party. ANZ chief executive Mike Smith

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Reserve Bank of Lilliput

Delusional Economics does a nice hatchet job on comments by RBA boffin Luci Ellis about the housing bubble. Sadly, however, there is more to dismember on the currency front. From Business Day: Reserve Bank of Australia (RBA) Head of Financial Stability Luci Ellis says the poor strength of the US dollar is no surprise, given

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Links Oct 6: Rates fallout

McCrann not wrong, RBA “confused”. Terry McCrannBig banks will raise unilaterally soon. John DurieJapan prints and buys the lot. FT AlphavilleUS-China trade war will only benefit Vietnam. NBOUS double dip still on. Rosenberg at PragCapStimulate the US. George SorosUS services grow. EconompicThe BHP/Rio zombie is dead. Der. SMHIs that a cup and handle formation in

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Egg all round

Yes, and some of it on this blog’s face. Though it did at least take the Joye/McCrann drivel to task. Both the RBA and the banks have suddenly backed off on rate rises (at least for mortgages). This blog can’t figure out if this is a wildly bullish or bearish signal. Probably neither. For clues,

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Happy Gouging Day

Another month over, another RBA meeting to decide the interest rate. The odds seems to be somewhere between 60% and 70% for a 25 bps rise, which should keep the AUD forex traders happy for a little bit longer. Given the mad frenzy of “anti rise” media over the last week it seems the Real

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Take it for the team (Updated)

This blog does not have a great deal of sympathy for complaints about bank gouging when it comes to interest rates. The reason is simple. If a nation wants to run a housing bubble based upon foreign borrowing then it should accept the logical consequences – that sooner or later competition will collapse around too-big-to-fail

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Links Oct 5: Rates day

Damn the lifeboats. Henry ThorntonFiscal cuts too. Tim ColebatchChina serious about busting bubble. Peter HartcherAnd the real problem. John GarnautSteel demand set to rise. FTBut not prices. Metal MinerOre prices still falling. Economic Times of IndiaThe bubbles that just won’t pop. Edward ChancellorChina will do what it wants with yuan. BloombergWhat can QE2 achieve? Econbrowser

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Beware the IMF within

In the last week the International Monetary Fund(IMF) released a report on the Australian economy , as noted here. It is full of the usual IMF gems flung across the world from behind the mahogany desks in Washington. In a statement released in Washington, the IMF said that the federal government appropriately withdrew its fiscal

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Housing velocity

Population growth is often cited as a causal factor in the overvaluation of Australian real estate. And indeed, strong population growth is a factor, particularly in recent years when housing starts have diminished, most especially in NSW. But one infrequently quoted housing statistic that calls into question the strength of population growth causation is what

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Links Oct 4:

Forget a rising yuan. Baseline ScenarioEuro is toast. Joseph StiglitzWeek ahead for the Dow. Calculated Riskde Gaull’s revenge. French plot new reserve. Zero HedgeBHP a length ahead for Potash. The AusCopper breaks free. BloombergAs inventories dive in London, NY and Shanghai. Metal PricesDutch Disease or overheating. You choose. David Uren

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RBAsymmetry

Terry McCrann wrote of the RBA on Saturday that: The belief that it won’t lift the cash rate on Tuesday is based on a fundamental misconception of what the RBA is trying to achieve and a misunderstanding of how and what it reads in the statistical tea leaves. Simply, brutally, it is not trying to

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Kohler Turns Spruiker

Has anyone else found Alan Kohler’s recent spruiking of Australian residential property annoying? Twice in the past week Kohler fronted  the ABC News Finance Report claiming that Australia has a chronic housing shortage that would prevent house prices from falling. In Kohler’s first finance report, from Monday 27 September, he provides the below chart (shown from 1.18 in the video) claiming that Australia’s housing shortage will reach a