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Jawboning is the new black

Regular readers will know that I have little time for the complaints of vested interests. But, one can’t help noticing just how many are out there talking down their circumstances just now. Don’t get me wrong, MacroBusiness has led the nation’s understanding of the economies’ current travails, and there are losers, contrary to the post-GFC

Latest posts

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May 17 Links: No bailout for IMF head

Up: grains, Flat: $US, gold, Aussie, Down: energy, ore, CRB No bailout for IMF head! Bloomberg Debt ceiling differences. Calculated Risk Empire index slows. Calculated Risk SocGen on Chinese slowdown. Zero Hedge Iran sends solidarity flotilla to Bahrain. Reuters More on copper and Chinese credit. Alphaville Inflation in Asia. FT More on commodities crash. Alphaville Lehman coughs up. SMH

17

Bears come out to play

Brokers have caught on. They must be reading MacroBusines. Much of the Australian economy is not in good health, Dutch disease is fast becoming Australian disease, and earnings forecasts in many sectors may be pretty dodgy. As more bearish sentiment starts to grip the market, the question it raises is: is it time to buy

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Trading Day – 16th May

The S&P/ASX 200 is down over 1% this afternoon, continuing the second leg of a correction that began in early April (down over 7%). Asian markets are also down, with the Nikkei down 0.6%, the Hang Seng 1% and Singapore 0.7%. The AUD is down to 1.05 against the USD, and 85 against the Yen

13

Predictable duds

ABS has released Housing Finance for March and Car Sales for April. First up Housing Finance, which we knew from other indicators was going to come in weak, and it did: MARCH KEY POINTS VALUE OF DWELLING COMMITMENTS March 2011 compared with February 2011: The trend estimate for the total value of dwelling finance commitments

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Bouris pushes the panic button

Australia’s home of business interests, Business Spectator, has struck another blow for schadenfreude this morning with a spectacular appeal for help for the mortgage sector from Mark Bouris. Bouris, the suave mortgage maestro of Wizard mortgages fame, has this morning leapt into the yawning gulf between Australia’s new growth model (resources) and the old growth model

9

BHP and the buck

As most of us will have heard, we’re a blessed country entering a second mining boom that is starting up after the first one was doused by the GFC in 2007.  This second boom will be longer and stronger than all before it, improving our terms of trade beyond anything this sunburnt country has experienced

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WA’s housing delusion

As I explained last week, the biggest driver in housing for the next decade has only really just begun to effect the market. However there is already growing evidence that the housing market is heading for trouble, and it isn’t just the South East of Queensland. In some other areas the news had become very bad. WA’s property market has fallen

48

Saul reveals all

Following is a guest post from Saul Eslake on last week’s Budget. Also find below a considered set of charts that offer a very clear view of last week’s Budget revenue assumptions. If you want to understand the punt we’re taking on China, not to mention growth in capital gains, this document is a must

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Links May 16: IMF head denies himself austerity

Week ahead for the Dow. Calculated Risk Global PMI roll over. The Economist Can this cycle now boom without commodities? Money Game No mortgage refinancing wave. Calculated Risk Sticky prices. Interfluidity (h/t Naked Cap) QE3 must save the US Budget. Zero Hedge Richard Koo would be proud. CFTC dollar love-in. Zero Hedge Lee Kwan Yew

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China sneezes, Australia calls an ambulance

To state the bleeding obvious, Australia’s economic fortunes are linked to the Chinese economy. China is Australia’s largest export destination, with its export share having grown from around 5% in 2000 to 22% in 2009 (see below IMF chart): And according to GMO, China alone accounts for nearly half of the world’s consumption of Australia’s

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The abundance of scarcity (and vice versa)

In response to my post last weekend on the emergence of meta-money, a hall of mirrors, in global finance, a US reader, Toby, said something that really had me thinking. This is a very important article which, sadly in my view, does not address Perpetual Growth, a key component of the challenges facing humanity. There

2

Australian dollar weekly wrap

It was a volatile weak for the Australian dollar, trading a broad range. At the close it has satisfied the next near term target in its downtrend that I had identified in yesterday’s Technical update and last week’s Wrap. That is, a daily close below 1.06 and to the extent the Aussie is closing lower (1.0573) as

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Weekend reading: Lost in Bretton Woods

Up: $US Flat: grains, ore, energy Down:  Aussie, gold US inflation bubbling. Calculated Risk Why Roubini could be wrong on China property. Beyondbrics ECB slams door on Greek FOI. Zero Hedge All about correlation. Zero Hedge John Taylor calls a sell. Bloomberg IMF considers term default for Greece. WSJ Europe’s two speed economy. Free Exchange UBS on commodities

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Trading Day – Friday the 13th

The S&P/ASX 200 is down slightly this afternoon, with some intra-day buying support similar to US markets recovery last night. Asian markets are down, with the Nikkei down 0.25%, the Hang Seng 0.4% but Singapore up over 0.46%. The AUD is back to 1.06 against the USD, and 86 against the Yen (which is highly

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Australian dollar on the skids

I think the AUD/USD exchange rate has made a medium term top at 1.1013 which is associated with what appears to be a turn in the USD and other markets at present. Turning points are never easy times for markets as the previous bulls cling to their tendencies and the emerging bears are a bit

20

Cut your debt, fool!

Wayne Swan spent a great deal of time reminding the nation of just how tough this year’s budget was going to be. While this is hardly a new strategy for federal treasurers, this year, the bogan had a creeping sense of unease; folk in their ivory towers were whispering about cuts to middle-class welfare. Really,

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Stagnation nation

The claim that Australian home prices will stagnate whilst incomes catch-up is a prediction commonly made by housing commentators. And this view is not without precedent. Between 2004 and 2009, Sydney home prices remained relatively flat, meaning that prices fell in both inflation-adjusted and income-adjusted terms (see below chart). It behooves us then to assess the

8

Peak profits

The big four banks have posted interim results (ANZ, NAB, WBC) and updates (CBA) this last week to the market. In this post I intend to articulate the consensus view, analyse and value the banks and provide a contrarian view to why they are likely the most riskiest stocks on the market. Consensus rules The

23

Sanity prevails on Hazelwood

The Victorian Coalition government confirmed this week that it had terminated talks on the previous government’s proposals to shut down two units at the Hazelwood power station in the Latrobe Valley. The focus on Hazelwood is because it’s the most greenhouse emission intensive plant in the country. This is as result of its age (latest

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Is the RBA’s work done?

Yesterday’s employment data to my mind was more than simply noise, regardless of what the punditry is saying. Houses and Holes used a couple of my charts in his post yesterday and the first one showed the trend in month on month employment growth and it is clear that it has been in a down trend for

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Links May 13: China tightens again

Up: energy, Flat: $US, Aussie, gold Down:  grains, ore Oil rout. Reuters IEA predicts ongoing high oil prices. FT The truth hurts. Bloomberg Vietnam battles inflation. The Ecomomist US’ stubborn unemployment. Calculated Risk Which central banks are buying gold? Zero Hedge US PPI high on oil. Zero Hedge Commodities and margin calls. Alphaville Fed and asset prices. Tim

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Employment thumps the bullhawks

The total number of people employed in Australia fell by 22,119 in April.   This is the third time in the past 5 months we have seen the total number of people employed in Australia fall. Yes, that’s right, the 3rd time in 5 months.   The market was looking for a gain of 17,000

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Housing’s Budget

For almost a year now I have been warning about the Australian market. It became clear quite some time ago that the falling rate of credit issuance towards housing and the demographics of Australia where going to lead to downward pressure on prices. Most recently I have been stating that I can’t see any new

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Trading Day – 12th May

The S&P/ASX 200 is down over 1.4% this afternoon, after digesting the slump in commodity prices and US/Euro markets overnight. Asian markets are all down, with the Nikkei down 0.8%, the Hang Seng almost 1% and Singapore just over 0.6%. The AUD has slumped to just above 1.06 against the USD, with a midday update

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Euro weakness changes the currency game

Last year the EUR got down under 1.20 and I was convinced it was going to its true value, in my opinion anyway of 1:1 with the USD. Nothing against Germany or even France for that matter but the bolted on Eurozone area to these and other “core” nations really does make the sum of the whole

12

Grantham calls the top

For those of you with a memory longer than a few days, it was Jeremy Grantham of GMO who famously called the bottom in the great GFC equity rout. Whilst I never put anyone on a pedestal, Granthan is one of the few equity strategists that sees the way markets actually work these days. Overnight

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Links May 12: Sell

Rocket: $US Smashed: energy, gold, grains, Aussie, CRB Flat: ore Bloomberg says its inflation. Bloomberg Grantham calls a sell. Zero Hedge Treasuries are back! Crossing Wall St US trade deficit blowing out. Calculated Risk Journey to default. Martin Wolf Chinese commodity demand falling. Alphaville Inflation spreading beyond food. Bloomberg SocGen. No, its deflation. Alphaville

8

RBNZ tells it straight

The Reserve Bank of New Zealand (RBNZ) today released its biannual Financial Stability Report (FSR).  For years, I have been a keen reader of the FSR as it provides an alternate view to the biannual Financial Stability Review released by the Reserve Bank of Australia in March and September. I also follow events closely in